Key Highlights

  • NTAA's Robyn Jacobson said the "first tranche of enabling legislation is expected to be introduced into Parliament next week".
  • What exists so far is a set of exposure draft bills released by Treasury on 3 September covering the minimum tax itself, the imposition of the tax, roll-over relief and the opt-out election.
  • Treasurer Jim Chalmers has pitched the measure as part of a broader reform package. "We're delivering a fairer tax system and helping fund tax cuts for workers," he said when releasing the drafts.
  • Trusts can opt out by electing to make fixed distributions to pre-nominated beneficiaries.

The federal government's 30% minimum tax on discretionary trusts is expected to be introduced into Parliament in the sitting week that begins on Monday 12 October 2026, according to the National Tax & Accountants' Association (NTAA). The NTAA says the measures "should not proceed in their current form". The bill would turn an exposure draft released only last month into legislation affecting family trusts that run businesses and hold investments, with the tax proposed to start on 1 July 2028.

What is Expected This Week

NTAA's Robyn Jacobson said the "first tranche of enabling legislation is expected to be introduced into Parliament next week". A Sky News headline also pointed to introduction this week. As at 11 October, the bill had not been introduced, so the timing remains an expectation rather than a certainty.

What exists so far is a set of exposure draft bills released by Treasury on 3 September covering the minimum tax itself, the imposition of the tax, roll-over relief and the opt-out election. Consultation closed on 18 September.

Under the drafts, the 30% minimum tax would apply from 1 July 2028, and expanded roll-over relief would be available for three years from 1 July 2027, allowing trusts to restructure ahead of the start date.

What the Government Says the Tax Does

Treasurer Jim Chalmers has pitched the measure as part of a broader reform package. "We're delivering a fairer tax system and helping fund tax cuts for workers," he said when releasing the drafts.

The government says "fewer than 10 per cent of Australia's 2.7 million active small businesses will be affected in any given year." Explanatory material cited by about 350,000 active small businesses operated through a discretionary trust in 2022–23, and around 40% are not expected to pay additional tax in a given year.

Trusts can opt out by electing to make fixed distributions to pre-nominated beneficiaries. Chalmers says this "does not require a restructure and is not expected to trigger state and territory stamp duties".

Under the drafts, the trustee would pay 30% of the trust's "minimum tax income", under a proposed section 101AA of the Income Tax Assessment Act 1936. Beneficiaries would then receive a minimum tax offset, which the NTAA says is non-refundable and limited to their own tax liability.

The Practitioners' Case Against

The NTAA, which says it represents more than 45,000 practitioners, has set out a long list of objections.

It says six substantive matters are left to legislative instruments, none of which had been released in draft. It also points to the 16-day consultation period, short of the 30-day minimum it cites from Office of Impact Analysis guidance.

On the numbers, the NTAA says top-rate shareholders of a corporate beneficiary would pay $69.71 in total tax on every $100 of trust income. It argues the protection for vulnerable minors stops at 18, leaving adults with disability without an equivalent exclusion.

The association's analysis of the beneficiary offset has already drawn attention. Because the offset is non-refundable, it says a beneficiary receiving a $45,000 distribution loses $9,748 of it, and full use requires taxable income above $229,320.

Key Dates and What to Watch

After introduction, a bill is commonly referred to a Senate committee for inquiry, which would give practitioners a further chance to put their case, although no referral has been announced.