Do I have to wind up my trust because of Budget? +
No. Trusts have not been abolished. Asset protection, succession planning benefits, and capital event advantages may still make trusts an appropriate structure in many circumstances. What is changing is the way income flowing through discretionary trusts may be taxed from FY29 onwards. For many clients, the solution may not be to wind up existing structures, but instead to explore options such as introducing share classes upstream and strategically planning around the proposed rollover relief window. The purpose of the session is to determine which approach may be most suitable for your circumstances.
When exactly do the changes hit? +
Three key dates to understand: 1 July 2027, proposed changes to the 50% CGT discount and negative gearing rules for new established property purchases are expected to commence. 1 July 2028, the proposed 30% minimum trust tax and anti-bucket company rules are expected to take effect. 30 June 2030, the proposed discretionary trust restructure rollover relief window is expected to close. EOFY 2026 is the planning runway, not the deadline. The earlier the strategy conversation begins, the more options may be available.
Will the bucket company strategy still work? +
For income flowing through a discretionary trust to a corporate beneficiary, the proposed anti bucket company rules from FY29 are expected to significantly impact how these arrangements operate. Companies themselves may still remain valuable structures, as the corporate tax rate is not currently proposed to change. However, the way income flows to those entities may require strategic redesign under the new framework. The session explains how the proposed rules may apply, the alternative strategies available, and the considerations relevant to different structures. The detailed design and modelling for your specific circumstances is completed as part of the Blueprint engagement.
What are share classes and how do they help? +
The trading company share structure may be redesigned so different family members hold different classes of shares. For example, A Class shares to Dad, B Class shares to Mum, C and D Class shares to adult children, while ordinary shares remain held by the trust. This may allow directors to declare dividends to specific share classes each year, enabling income to flow directly from the company to individuals at their personal marginal tax rates, while maintaining refundable franking credits where applicable. A similar structure may also be applied to an investment company holding passive assets or investments. As income may flow directly from the company rather than through the trust, the proposed 30% minimum trust tax and anti-bucket company rules may not apply in the same way. These strategies require careful structuring and professional advice. Considerations such as value shifting provisions, CGT implications, Part IVA anti avoidance rules, PSI rules, and constitutional drafting all need to be properly reviewed and implemented. For family groups operating under a trust owns company structure, this is expected to become one of the most significant restructure conversations over the coming years.
What is the rollover relief, and how do I use it? +
The government has proposed CGT and income tax rollover relief for certain restructures out of discretionary trusts, available during a 3 year window from 1 July 2027 to 30 June 2030. In practical terms, this may allow eligible assets to be moved from a discretionary trust into another structure without triggering the CGT and stamp duty consequences that would normally apply. While this is expected to be a significant concession, the relief period is limited, and the right structure and strategy should be carefully designed before any action is taken.
My household relies on trust distribution refunds. What happens to those? +
From FY29, discretionary trusts may be subject to a proposed 30% minimum tax before distributions are made, with beneficiaries receiving non-refundable credits. In practical terms, beneficiaries on marginal tax rates below 30% may no longer be able to claim back excess credits in the same way franking credits currently allow. While income splitting strategies may still provide some benefit, the overall tax effectiveness is expected to reduce significantly under the proposed rules. For many family groups, implementing share class structures within the underlying company may become a cleaner and more effective long term approach.
Is this a tax return appointment? +
No. This is a strategic conversation focused on the proposed post Budget legislation, the operational and tax structure changes it may trigger, and the key issues trust operators are currently facing. It is not a standard tax return appointment.
What happens if I proceed with the Blueprint? +
Your $249 session fee will be credited towards the $2,950 Blueprint engagement fee. The Blueprint includes a comprehensive written strategy report with recommended execution next steps, full mapping of your existing entities and structure, CGT and tax calculations on potential restructure options, and research into available restructure relief provisions, including pathways that may allow restructuring without triggering unnecessary tax consequences. Where BWC acts as your ASIC agent, associated lodgements and entity restructure actions can also be managed as part of the engagement.
Do I need to be in Brisbane? +
No. Sessions are conducted online, and BWC supports trust operators Australia wide.
