03/09/2026
šØ They didnāt save discretionary trusts.
They just put them in a smaller cage.
And now they want applause for it š
Hereās the game.
The proposed 30% minimum tax on discretionary trusts is still on the table from 1 July 2028. But after the backlash, the government is now floating a āworkaroundā.
Instead of forcing people to restructure out of their discretionary trust and potentially cop a stamp duty bill, they may let some trusts elect into a fixed-distribution model.
Sounds good?
Not so fast.
A discretionary trust is valuable because it is discretionary. That means the trustee can decide each year who receives income based on the familyās circumstances, tax position, business needs, asset protection, succession planning and lifeās usual surprises.
Under this new workaround, you may be able to keep the trustā¦
ā¦but only if you stop using the discretion.
So yes, the trust may survive.
But the flexibility gets dragged out the back and quietly shot.
Classic Canberra:
ā
Create the problem
ā
Panic the market
ā
Watch accountants and lawyers scramble
ā
Announce a āconcessionā
ā
Give people back half of what they already had
ā
Expect applause
No thanks.
If you own property, run a business, or hold investments through a discretionary trust, do not fall asleep on this.
You need to ask:
ā Can your trust deed even allow fixed distributions?
ā Who are the beneficiaries?
ā What percentages would be locked in?
ā Would changing the deed trigger tax or duty issues?
ā Would you lose the very flexibility you set the trust up for in the first place?
ā Does your structure still make sense after 2028?
Because letās call this what it is.
This is not a full backdown.
This is not a green light.
This is not ātrusts are fine nowā.
It is the government saying:
āYou can keep the carā¦
ā¦but weāre taking the steering wheel.ā š
And for many families, investors and business owners, the steering wheel was the whole bloody point.
Get your trust deed reviewed.
Get proper tax advice.
Start planning now.
Because the people who wait until the law is final will be standing in the same queue as everyone else, paying premium fees, under pressure, with fewer options.
Thatās not strategy.
Thatās panic wearing a suit.