Global Daily Tax News, Australia Introducing Minimum Tax On Discretionary Trusts, (May 13, 2026)

The Australian Government has announced plans to introduce a new 30 percent minimum tax on discretionary trusts from July 1, 2028, in the nation's new Budget released on May 12, 2026.

Since 2001–, the number of discretionary trusts in Australia has doubled, exceeding the growth in companies (which have grown by 70 per cent).

Australia now has over one million trusts, of which around 840,000 (80 percent) are discretionary trusts. The majority of trust income flows to the top earning 10 percent of families and approximately 90 percent of total private trust wealth is held by the wealthiest 10 percent of households (those with net worth above around AUD2.3m).

The Government has said, "The introduction of a 30 percent minimum rate will mean a fairer rate of tax paid on discretionary trust income, better aligning the tax rate on trust income with the tax rates paid by workers."

The tax will be paid by the trustee. Beneficiaries will still need to declare their trust income in their tax returns, but beneficiaries, other than corporate beneficiaries, will receive non-refundable credits for the tax payable by the trustee.

Rollover relief will be available to assist small businesses and others that wish to restructure out of a discretionary trust into other arrangements, such as a company or a fixed trust. This will provide expanded relief from income tax consequences, including capital gains tax, for those who choose to restructure, and will be available for three years from July 1, 2027, the Government said.