Treasury has released a consultation paper proposing a 30% minimum tax on discretionary trusts, and the response from the profession has been notably blunt.
Accountants Daily reported on 3 August 2026 that View Legal director Matthew Burgess has argued the proposals should be abandoned in favour of a comprehensive review of trust taxation. His submission was lodged on 30 July 2026.
If you act for family groups, you will be fielding calls about this. This is a note on what can responsibly be said today.
What is actually proposed
The consultation paper proposes a minimum tax rate of 30% applying to discretionary trusts. Per the reporting, practitioners have modelled the interaction with existing rules as producing an effective double-taxation outcome approaching 70%.
Burgess's central arguments, as reported:
- The proposals add complexity and compliance cost without addressing the structural issues in trust taxation.
- Consultation has been inadequate for a change of this significance.
- Discretionary trusts serve genuine commercial, asset protection and succession functions that are not reducible to tax minimisation.
- Reform should balance revenue objectives against encouraging entrepreneurship and investment.
- In his framing, the proposal "diminishes confidence in the fairness and integrity" of the tax system.
Related coverage is worth reading alongside it. Accounting Times has published Pitcher Partners on the shifting landscape for family-owned businesses, which covers the proposed changes and testamentary trust exemptions, and a piece noting that restructuring valuations are becoming an opportunity for tax agents as family groups contemplate their position ahead of CGT consequences.
What is not known
This is the part that matters for client conversations, and it deserves stating plainly.
Nothing here is law. A consultation paper has been released and submissions have been made. The reporting does not indicate that Treasury has responded, nor does it set out a timeline for a final decision. There is no draft legislation, no announced start date, and no confirmed design.
Any client who has been told by someone at a barbecue that trusts are "about to be taxed at 30%" is describing a proposal, not a rule.
What to say to clients this month
Acknowledge it directly. Clients who have read the coverage will lose confidence in an adviser who appears unaware. Confirm the consultation exists, confirm the proposed rate, and confirm the profession is pushing back.
Be explicit about status. Consultation paper. Submissions lodged. Not legislated. No commencement date. Say all four.
Do not restructure on a proposal. Unwinding or restructuring a trust has immediate, certain CGT and duty consequences. Doing that in anticipation of a measure that may be amended beyond recognition or abandoned is trading a definite cost for a speculative saving. The Accounting Times piece on restructuring valuations is worth reading precisely because it shows how quickly a valuation-and-restructure market forms around uncertainty.
Do get the records in order. This is the genuinely useful action available right now, and it is useful under every possible outcome.
Why records are the no-regrets move
Whatever emerges from this consultation — a 30% minimum tax, a narrower measure, a broader review, or nothing — every path leads to the same operational requirement: trust groups will need to demonstrate, with evidence, what actually happened.
That means:
- Distributions properly documented and resolutions made before year end, not reconstructed afterwards.
- Inter-entity loans reconciled and supportable. Division 7A exposure inside family groups is frequently discovered during a restructure, not before one.
- Beneficiary accounts that agree to the ledger, with unpaid present entitlements tracked rather than assumed.
- Trust bank accounts reconciled continuously, so that the transaction history behind a distribution is complete and coded rather than a year of untouched feed.
If a restructure does become advisable later, the valuation work described in the Accounting Times article depends on defensible historical financials. A family group whose trust accounts are reconciled and documented can act quickly and cheaply. One whose records are eighteen months behind will spend the first two months of any restructure just establishing what the position is.
For practices carrying a lot of family group work, that reconciliation backlog is the practical constraint. Keeping trust and inter-entity accounts continuously reconciled — rather than annually, in a rush, in May — is what converts a policy change from a crisis into a planning exercise. That is the problem ReconLink is built for, and we would obviously like you to consider it; the underlying advice to get records current holds regardless.
What to watch
- Treasury's response to submissions, and whether draft legislation follows.
- Whether testamentary trust exemptions survive in any final design — this materially changes succession planning advice.
- Commencement and transitional rules, which will determine whether pre-emptive action ever made sense.
Until draft legislation exists, the advice that ages well is: document thoroughly, reconcile continuously, restructure for commercial reasons rather than speculative ones.
Frequently asked questions
Has a 30% minimum tax on discretionary trusts been legislated? No. A Treasury consultation paper proposing it has been released and submissions have been lodged. There is no draft legislation and no confirmed commencement date.
What is the double taxation concern? Practitioners have modelled the proposal's interaction with existing rules as producing an effective outcome approaching 70% in some scenarios. This is a criticism raised in submissions, not an accepted feature of a final design.
Who has publicly opposed the proposal? Matthew Burgess of View Legal lodged a submission on 30 July 2026 arguing the proposals should be abandoned in favour of a comprehensive review of Australia's trust taxation framework, as reported by Accountants Daily.
Should clients restructure or wind up trusts now? Restructuring carries immediate and certain CGT and duty costs. Incurring those in anticipation of an unlegislated proposal is generally difficult to justify. Restructure for commercial reasons; wait for legislation before responding to it.
What should clients actually do this month? Bring records current — distribution resolutions, inter-entity loan reconciliations, beneficiary accounts, and trust bank reconciliations. These are valuable under every outcome and are the prerequisite for acting quickly if the law does change.
Are testamentary trusts affected? Testamentary trust exemptions are among the matters discussed in the current coverage of the proposals. Because no final design exists, treat their treatment as unresolved.
The short version
A consultation paper is not a law. Tell clients what is proposed, tell them what is not decided, and steer them away from irreversible restructuring. Then use the window to get the records into a state where any outcome can be responded to quickly.