Minimum tax on discretionary trusts
Submission Date: 31 July 2026
The Law Council of Australia provided a submission to respond to Treasury’s consultation paper, Minimum tax on discretionary trusts, released on 8 July 2026 (Consultation Paper), concerning the proposed 30 per cent minimum tax on discretionary trusts, which the Government proposes to introduce from 1 July 2028. This submission has been prepared by the Taxation Committee of the Law Council’s Business Law Section, with additional input from the Legal Practice Section’s Charities and Not-for-profits Committee.
Under the proposed measure, the trustee would pay a minimum 30 per cent tax on the taxable income of the trust, while beneficiaries would continue to be assessed, and to receive a corresponding non-refundable offset, on their share of that income under the existing framework in Division 6 of Part III of the Income Tax Assessment Act 1936.
The Taxation Committee supports a targeted integrity measure directed at income splitting through the use of trust arrangements but considers that the proposed regime is considerably broader than that objective requires.
Last Updated on 07/08/2026
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