Council Warns Small Businesses of Potential Tax Shock Under Labor’s Trust Reforms
Trusts can opt out of the minimum tax by locking in fixed income for beneficiaries, but any change could trigger a penalty.
TL;DR
- Labor's proposed trust tax reforms could result in significant tax bills for small family businesses.
- The government plans to introduce a 30 percent tax on discretionary trust income from July 1, 2028.
- COSBOA CEO Skye Cappuccio stated the new rules are "too harsh for most businesses to consider."
- The measure aims to close tax loopholes and promote tax system fairness.
- Family trusts allow trustees to distribute income to family members, which can legally reduce tax obligations.