TaxOfficial change3 weeks ago
Trusts tax bill introduced: 30% minimum tax on discretionary trusts proposed from 1 July 2028 Proposed, not yet law
Passed the House of Representatives on 29 Oct 2026. Before the Senate. Senate Economics Legislation Committee report due 13 Nov 2026. Proposed, not yet law.
General information only. Not personal financial or tax advice.
What the bill proposes
- Minimum tax on discretionary trusts. From 1 July 2028, trustees would pay a 30% minimum tax on the taxable income of discretionary trusts. Beneficiaries other than companies would get a non-refundable offset for the tax the trustee pays. The rate itself sits in a companion bill, the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026.
- Exclusions. These cover fixed trusts, charitable trusts, special disability trusts, super funds, primary production income, certain income relating to vulnerable minors, deceased estates and genuine testamentary discretionary trusts. Distributions to registered charities and DGRs are also exempt.
- Roll-over relief from 1 July 2027. This is for those who want to restructure out of a discretionary trust, for example into a company or a fixed trust.
- Election to be exempt. A trust could elect to be exempt from the minimum tax for as long as it distributes to pre-nominated beneficiaries in line with an upfront nomination. The Government says this would not require a restructure or restrict the trust's discretionary powers, and is "not expected" to trigger state stamp duty.
- Negative gearing and CGT, next tranche. The bill clarifies how the CGT reforms apply in complex cases, including trusts. It also defines a "new residential dwelling" and exempts the following from the negative gearing limits: affordable and public housing, specialist disability accommodation, retirement village operators, residential aged care, and build-to-rent developments. Law since 26 June 2026 (Tax Reform No. 1 Act 2026). From 1 July 2027, negative gearing of residential property is limited to new builds. Properties held at 7:30pm AEST on 12 May 2026 are exempt from the negative gearing change. From 1 July 2027 the 50% CGT discount is replaced by cost base indexation and a 30% minimum tax rate, for gains that accrue after that date. General information only. ATO tax reform (updated 29 Jun 2026) · Tax Reform No. 1 Act 2026.
- Payday Super. The bill gives transitional relief for excess contributions in Payday Super's first year.
What it means for you (general information)
Doctors who use a family trust, a service trust for their practice, or a trust that holds investments may be affected if the bill passes in its current form. The roll-over and election options are part of the proposal and are not available yet. Whether any of this matters for your situation depends on your own circumstances.
Not included
- Detailed rules, such as how the fixed trust definition, the offsets and franking credits work. See the explanatory memorandum, linked from the bill homepage.
- Any amendments made during the bill's passage through Parliament.
- State stamp duty outcomes, which the Government describes only as "not expected".
- Personal advice. Speak to a registered tax agent or adviser about your own situation.
Sources (all dated 14 Oct 2026 unless noted)
- Treasurer's media release · 14 Oct 2026
- Second reading speech · 14 Oct 2026
- Bill homepage, Parliament of Australia (status "Before Reps", introduced 14 Oct 2026; explanatory memorandum available from this page) · 14 Oct 2026
- Budget 2026–27 tax explainer · May 2026
A rough figure — not advice. Terms
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