Labor’s Trust Tax Backflip Preserves Structures, But Not Flexibility

The Albanese Government has softened one of the most commercially damaging parts of its proposed 30% minimum tax on discretionary trusts, giving existing trust structures another option besides an expensive restructure.

Under exposure draft legislation released this week, a discretionary trust that exists on 1 July 2028 could elect to make fixed distributions to pre nominated beneficiaries. This allows it to sit outside the proposed 30% minimum tax regime without transferring assets into a company or fixed trust.

That is a significant change.

The concession follows growing concern from small business groups, family enterprises and advisers that the original proposal. . .