The proposed minimum tax on family trusts: what we know so far

What's proposed

• Today, a family trust usually pays no tax itself. The beneficiaries pay tax on what they receive, at their own rates.
• Under the proposal, the trustee would pay a minimum level of tax on the trust's income, so spreading income to family members on low rates would save much less.
• It would start on 1 July 2028. Fixed trusts (such as most unit trusts with set entitlements) are generally not caught, and some other trusts are excluded.
• A Senate committee is reviewing the laws, with a report due in mid-November 2026. They're unlikely to pass before Christmas.

Who it would affect most

• Family trusts that pay income to a company beneficiary (a 'bucket company'). As drafted, the company doesn't get credit for the tax the trust already paid, so the same income can be taxed twice.
• Trusts used to share business profits across family members on different tax rates.
• Testamentary trusts (set up in a will) created from 1 July 2028 lose their exclusion if a company or another trust can be a beneficiary. Many existing wills are written that way and may need updating.

The options being offered

• A one-off election, in the 2028-29 year, to lock in how the trust's income is paid out each year. Once made, it can only change on a death or a relationship breakdown.
• A tax relief window, from 1 July 2027 to 30 June 2030, to move the trust's assets into another structure without paying capital gains tax. It has strict conditions: generally everything has to move to a single entity.
• Stamp duty relief is up to each state, and so far it's patchy, so moving property (especially land) could still cost duty.

What we suggest for now

• Don't restructure yet. The law isn't final, details are still to come, and the Coalition and One Nation have both said they would repeal it. A federal election is due before 2028.
• Do get your trust deed checked. Older deeds may not allow the elections the new rules depend on.
• If you have a will with a testamentary trust, put a review with your lawyer on the list.
• Setting up a new structure now? Plan for both outcomes: the tax going ahead, and it not.

We'll update this page as things change. If you have a trust, book a consult and we'll look at what it would mean for you.