Are Family Trusts the New Target
🔍 Are family trusts the next tax target? Here’s what’s brewing in Canberra…
Treasury’s looking under the hood of family trusts, again… with murmurs of tougher tax rules to help patch up the budget.
Why?
Because nearly $60 billion flows through these structures each year, benefiting over 1.7 million Australians, from farmers and family businesses to professionals and investors. And with national spending ballooning on the NDIS, defence, and interest on $1 trillion in debt… it’s clear the government’s searching for spare change behind every couch cushion.
The pitch?
To tax trust distributions like other investment income. Maybe a flat 20% rate. Maybe a minimum 30% tax, like Labor once proposed. Either way, it’s back on the table.
💥 But here’s the kicker:
About half of trust income is already taxed at the top marginal rate of 47%. So will these proposed changes really raise meaningful revenue? Or just punish prudent financial planning?
Trusts aren’t loopholes.
They’re tools – to manage risk, protect assets, and smooth income across generations. Used correctly, they support long-term wealth creation, not tax dodging.
But the political narrative matters.
If trusts are cast as “tax avoidance schemes”, policy will follow sentiment, not strategy. And that has major implications for the economy, especially for business owners who rely on these structures to invest, grow, and employ.
Let’s be real.
Trusts aren’t tax dodges. They’re legitimate vehicles for investing, protecting assets, managing risk, and spreading income in a structured way.
Targeting them now, on top of the $3M unrealised capital gains super tax change, sends a loud message:
❌ Invest in Australia? No thanks.
❌ Back a startup? Too risky.
❌ Build wealth here? Better off going offshore.
That’s not reform. That’s a warning siren.
đź‘Ž Fewer local investments
đź‘Ž Less incentive to back small business
đź‘Ž A nation penalising hard work and smart planning
What kind of economy are we shaping if every step forward gets punished?
We don’t need band-aid tax grabs.
We need structural vision, and policy that rewards effort, not undermines it.
👉 Business owners: review your structures.
👉 Advisors: talk to your clients now.
