Key Highlights

  • The Tax Institute says the trust and CGT regime was frantically developed and rushed through Parliament.
  • Later tranches of CGT rules, including roll-overs and employee share schemes, are still to be released.
  • Trustees may need to make restructuring decisions before the full rules are known.
  • The submission calls for clearer timing before the rules take effect.

The country's peak body for tax professionals has warned senators that they are being asked to approve rules that have not been fully written. In its submission on the trust tax and Capital Gains Tax bills, The Tax Institute described "a regime that is being frantically developed at the same time as it is being rushed through Parliament". With hearings starting on Thursday, the warning puts timing, not just policy, at the centre of the Senate debate.

What The Tax Institute told the Senate

The Tax Institute's submission went to the Senate Economics Legislation Committee's inquiry into the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026, Reports said.

Its core complaint is that the overall timeframes are too short for what observers described as some of the most significant tax measures in decades. It echoed concerns from the Financial Advice Association of Australia about short consultation periods, and some major accounting groups made similar points.

The Institute said the approach "is indicative of a regime that is being frantically developed at the same time as it is being rushed through Parliament, and is not being given the proper consideration it merits".

"In our view, this approach does not serve taxpayers, their advisers or the system," it said.

A key problem, according to the submission, is that important parts of the regime have not yet been released.

Administrative, reporting, notification and collection rules, along with rules on how the new measures interact with existing law, are still to come. That means the committee is being asked to consider only part of the regime.

"The Government's approach of progressing these reforms in multiple tranches has also made it harder to keep track of which measures have passed, which are before Parliament, and which are yet to be introduced," the Institute said.

CGT changes arriving in tranches

The capital gains tax overhaul is a clear example. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 is already law.

It replaces the 50% CGT discount with cost-base indexation and a 30% minimum tax for gains accruing from 1 July 2027. It also limits negative gearing to new builds for residential property bought after 7:30pm AEST on 12 May 2026, from 1 July 2027, with existing holdings grandfathered.

Schedule 4 of the Tax Reform No. 3 Bill is the second Tranche of those CGT reforms. According to paragraph 4.179 of the explanatory memorandum, later tranches will cover matters including CGT roll-overs, foreign and temporary residents, tax consolidated groups, employee share schemes and demergers.

In other words, the start date for the CGT changes is set in law, but some of the detailed rules that will apply to particular groups are still being drafted.

Explainer: what's law, what's a bill and what's still unwritten

For readers trying to track the moving parts, here is where things stand as at 4 November 2026.

Enacted law:

  • Tax Reform No. 1 Act 2026: CGT discount replaced by indexation plus a 30% minimum tax on gains accruing from 1 July 2027; negative gearing limited to new builds for property bought after 12 May 2026 budget night, from 1 July 2027.

Bills before the Senate (not law):

  • Tax Reform No. 3 Bill 2026: the trust minimum tax framework, the second CGT tranche, and other measures.
  • Minimum Tax on Discretionary Trusts Bill 2026: the 30% rate itself.
  • Proposed start dates: restructure relief from 1 July 2027 and the minimum tax from 1 July 2028.

Still to be released, according to The Tax Institute's submission:

  • Administration, reporting, notification and collection rules;
  • Interaction rules;
  • Further CGT tranches, including roll-overs, foreign and temporary residents, consolidated groups, employee share schemes and demergers.

Why trustees face decisions without the full rules

The sharpest part of the Institute's warning concerns families and businesses that use trusts.

"Taxpayers are being asked to make long-term decisions, including whether to restructure, while key parts of the rules remain unknown," the submission said, according to reports.

"Trustees may need to decide whether to restructure or make an election before they know the compliance obligations that will apply if they are subject to the minimum tax," it said.

Under the bill, trustees would broadly face three paths: accept the minimum tax, restructure using rollover relief, or make an election to lock in fixed distribution proportions.

Each path has long-term consequences for tax, asset protection and succession. Restructuring can also involve state stamp duty, which falls outside federal control.

Without the reporting and administration rules, trustees and their advisers cannot fully compare the ongoing cost of each option.

The timetable adds pressure. Proposed rollover relief would open on 1 July 2027, less than eight months from now, and run for three years. Trustees planning to restructure early would be making choices while the compliance detail is still unpublished, unless the outstanding rules arrive first or the start dates move.

A chorus of concerns

The Tax Institute is not alone. On the same day, tax lawyer Adrian Cartland told reporters that parts of the trust bill could spark decades of litigation, describing the fixed trust provision as "unsalvageable". He said one test would require "a 20-page advice" for every trust, every year.

Not everyone wants a slower process. The ACTU has urged all senators to pass the trust tax, arguing it would close an unfair loophole for higher-income households.

The government says the measure is targeted. In his second reading speech, Treasurer Jim Chalmers said "more than 90 per cent of small businesses will not be affected" in any given year.

What to watch

The key dates and decisions ahead:

  • Thursday 5 November and Friday 6 November: Senate Economics Legislation Committee hearings.
  • Friday 13 November: committee report due, which may include recommendations on timing.
  • Late November: final Senate sitting days of 2026.
  • Release of the outstanding administrative and reporting rules, and further CGT tranches.
  • 1 July 2027: CGT changes under the Tax Reform No. 1 Act begin, and proposed trust restructure relief would start.
  • 1 July 2028: proposed start of the 30% minimum tax on discretionary trusts.