While there has been no shortage of clutching of pearls following the 2026 Budget announcements in Australia, the reality for our clients is more practical: structures should always be reviewed as the law, tax settings and family circumstances change.
Children turn 18. They marry. They have children of their own. They move overseas. These are the kinds of changes we periodically capture through our Self Assessment tool located here.
I am proud to say that many of our clients are successful, thoughtful and realistic about tax. For them, a good tax result is often paying anything less than the top marginal rate from time to time.
Many already distribute around $190,000 to each adult family member, with the last portion taxed at 37%, and the balance distributed to a bucket company, which pays tax at 30%. They also understand that top-up tax may be payable when money is later extracted from that company. Seen in that context, a 30% minimum tax on discretionary trusts is not something to get too het up about.
As estate specialists, CGT rollover relief is one of the key tools in our armoury. Our Restructuring service helps clients review whether their current legal and tax structures still serve their family, business and succession objectives over the long term. Too many people focus only on the short term and miss the deeper opportunity: to be a better ancestor.
The Government has announced a proposed 30% minimum tax on discretionary trusts from 1 July 2028, with some exceptions, and a three-year rollover relief window from 1 July 2027 to assist those who wish to restructure out of discretionary trusts into other structures, such as companies or fixed trusts.
The detail for this latest rollover relief has not yet been released, but we will be all over it when it is. Our aim will be to help clients adapt quickly and incorporate any new relief into the planning we would be doing for them anyway.
Where available, we consider existing rollover reliefs, including the small business restructure rollover, which can allow eligible active business assets to be transferred between entities without an immediate income tax liability. We also consider other CGT rollover concessions that may apply to company, trust or business restructures. The small business restructure rollover has been available for transfers of active assets from one entity to another since 1 July 2016.
Our main concern from the 2026 Budget is that the noise may scare people away from using trusts altogether.
As people often tell lawyers — who, admittedly, can make poor investment decisions, especially at this time of year — do not make an investment based only on the tax. Make it on the fundamentals. That is what I try to share with my clients: what I have learned, and what I do myself.And the fundamentals of trusts remain strong.
Trusts are still powerful for the very important purpose of asset protection. They can help keep assets safe for at-risk people, including young people who may need protection from themselves until they mature. For boys, the latest research suggests that may not be until their late 20s.
If advisers chase tax benefits into fixed trusts without thinking carefully, that asset protection may be put at risk under the old rule in Saunders v Vautier.
This latest foghorn blast has been coming for a long time — at least since 2019. It is not theend of the world for our clients. Good advisers should be able to get on top of new factual matrices quickly.
Some say accountants have a conflict of interest when setting up new structures, because each new structure can produce another compliance fee. Whether or not that is fair, clients deserve advisers who are willing to test their own work in light of changing circumstances.
They also deserve advisers who hold structures lightly, but intelligently. Structures are not sacred. They are simply piggy banks.
“All things must pass,” as George Harrison wrote. We live by this.
I spend a lot of my time explaining to parents that their adult children may not want to share a discretionary trust or a business forever. Restructure may be inevitable as the family moves from a monarchy (being the parents) to a democracy (being the children and their growing families).
In the real world, that transition rarely happens smoothly without a revolution, a coup, or at least a few difficult meetings.
A good restructure should not merely move assets from one box to another. It should preserve value, reduce future conflict, clarify control and support the long-term stewardship of family wealth.
We work closely with your accountant, financial adviser and other professional advisers to design a practical pathway.
Sometimes the answer is not to restructure at all. Sometimes it is better to leave the structure alone and improve the education of the people involved, the surrounding documents, the governance framework and the succession arrangements.
Don’t just write a screenplay. Show the script to the actors.
We call it family governance. And if you want to save tax in the short term while increasing the competence of your young people, why not have a rites of passage meeting with them before the end of the financial year and involve them in making philanthropic donations?
Our smart clients have been doing that long before this latest Budget.
#BeABetterAncestor
