Written For The Australian - Trusts wealth crackdown creates double taxation trap – your new options
by James GerrardTue Jul 28 2026
Sixty thousand dollars of tax on $100,000 of income. That's the eye-watering outcome staring down some family trust owners under Labor's proposed 30 per cent minimum tax floor — and it's why the most popular private wealth structure in Australia is heading for extinction.
The discretionary family trust has been the backbone of private wealth in this country for generations. Flexible, tax-effective, and battle-tested through every government and market cycle. But from 1 July 2028, distributions will cop a 30 per cent minimum tax, with no grandfathering. Worse still, if you distribute to a "bucket company" — a common strategy — the legal fraternity is warning of straight-up double taxation, with no offset or credit to protect you.
The government has offered a three-year window for CGT-exempt restructuring, but stamp duty is another matter entirely. The states have gone quiet, and CPA Australia's Jenny Wong nailed it when she called this a "postcode lottery" — the same restructure could cost one business nothing and another tens of thousands, purely based on geography.
Here's my concern: we're being asked to make expensive structural decisions based on rules that don't yet exist. And if there's a change of government in 2028 — which is no longer the certainty it once seemed — we could see the whole thing rolled back, triggering another round of stamp duty as families scramble back into trusts.
Family investment companies are shaping up as the likely replacement, potentially with different share classes to give distribution flexibility. But the ATO is already flagging Part IVA anti-avoidance concerns, so don't assume you can simply replicate trust flexibility inside a company wrapper.
My advice? Don't act prematurely. Model your options, understand what a fixed trust or corporate structure might look like for you, but hold off on any major restructure until the legislation is actually passed. Right now, we're all boxing at shadows.