The Australian Government has proposed changes that could significantly affect families who use discretionary family trusts to hold and manage assets.
From 1 July 2028, a 30% minimum tax rate is proposed to apply to distributions from discretionary trusts. A proposed transition period from 1 July 2027 to 30 June 2030 would also allow certain assets to be restructured out of trusts, subject to the final legislation and applicable requirements.
Importantly, the proposed changes are not yet law, and any decision to restructure should consider the tax, legal, asset protection and succession consequences.
The proposed changes have raised concerns about the potential for double taxation, particularly where trust income is distributed to a corporate beneficiary (commonly known as a “bucket company”). There may also be stamp duty consequences where property or business interests are transferred out of a trust and into another structure.
For families with significant assets held through a discretionary trust, the proposed changes provide an opportunity to review existing wealth and succession arrangements. This may include considering how assets are held, who controls the trust, how control will pass on death or incapacity, and whether existing Wills work effectively with trust and company structures.
At RobertsLaw, we help families protect their hard-earned assets and plan for the effective transfer of wealth across generations, with our practice focused on wills, probate, estate planning and succession law.
If you have a discretionary family trust or significant assets held through a trust structure, now may be a good time to review your estate and succession arrangements. Contact our office to book a consultation with our Accredited Specialist in Succession Law and discuss how the proposed changes may affect your family’s future.