Small businesses get workaround to dodge trust tax restructuring costs

Small businesses with discretionary trusts now have a choice. They can make fixed payments to chosen beneficiaries. This lets them escape a 30 per cent minimum tax coming to trusts in 2028. They won't need to restructure.

Why it mattersMost small businesses use discretionary trusts because their income varies. The workaround forces fixed payments, so it won't help them much. Stamp duties stay a major cost for those who restructure.

AustraliaAustralian small businesses using trusts have two weeks to comment on the draft, then must decide by July 2028 whether to restructure or change their distribution model.

Corroborated byperthnow.com.au

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Trust tax escape hatch removes flexibility small businesses need, lobby warns

The government lets nearly 250,000 small businesses avoid a trust tax with an at least 30 per cent floor. The catch: they must lock in beneficiary splits permanently.

Why it mattersSmall business owners would face higher taxes and lose planning flexibility. That flexibility helped them manage cash. It also helped them adapt to family changes.