Australia: Trusts

The Australian Treasury has released exposure draft legislation detailing the implementation of a 30% minimum tax on discretionary trusts, introducing a new election regime that allows trusts to nominate fixed distribution entitlements and avoid the minimum tax. While the draft addresses stakeholder feedback and provides rollover relief for restructuring, it presents complex compliance requirements, strict limitations on beneficiary variations, and potential resettlement issues that may create challenges

Australian taxpayers face a challenging paradox where courtroom victories against the Australian Taxation Office often prove pyrrhic, as favorable judicial decisions are routinely neutralized through swift legislative amendments and persistent administrative enforcement. Recent landmark cases involving trust distributions and capital gains definitions illustrate how the government systematically overrides judicial outcomes to protect revenue interests. Understanding this pattern of legislative intervention

A new proposed minimum tax on discretionary trusts aims to prevent income-splitting but could inadvertently capture commercial trust structures used by property and infrastructure groups. The definitional challenge centers on what constitutes a 'discretionary trust' and whether the existing fixed trust rules are appropriate for determining scope. Without proper limitations, many multi-layered structures with no income-splitting function may face unintended tax consequences and compliance burdens.

The 2026 federal Budget introduced significant changes to capital gains tax, negative gearing, and discretionary family trusts that may impact your estate planning strategy.

The 2026 Federal Budget has introduced significant changes to how discretionary trusts, including testamentary discretionary trusts (TDTs), will be taxed. If passed, these changes have far-reaching implications for estate planning strategies that many families use to protect and pass on wealth.

The quote sometimes attributed to Vladimir Lenin that “there are decades where nothing happens; and there are weeks where decades happen” seems particularly appropriate in relation to the 2026 Federal Budget.

Did the trustee validly amend a trust deed to remove & replace the Appointor. Case highlights key risks in trust control & estate planning.

Family Office Comparative Guide for the jurisdiction of Australia, check out our comparative guides section to compare across multiple countries

Major reforms impacting how trusts are managed, who can act as trustee, and what information must be shared with beneficiaries.