The Federal Government's proposed minimum tax on discretionary trusts is facing renewed resistance from business and accounting groups ahead of further parliamentary scrutiny.
The changes would impose a minimum tax rate on affected discretionary trust income from July 2028, with the government arguing the measure will improve fairness across the tax system.
However, business groups have raised concerns about compliance costs, double taxation risks and the impact on private investment.
CPA Australia has also warned that families and small businesses should not be forced to make permanent structural decisions before all elements of the regime are finalised.
Compliance burden in focus
The proposal gives some trusts the option of avoiding the minimum tax by locking in nominated beneficiaries and distribution proportions.
Critics argue that could require businesses and families to make long-term decisions about ownership and distributions before there is sufficient certainty about how the final legislation will operate.
Business Council analysis has also raised concerns that implementation and professional advisory costs could substantially exceed government estimates.
The debate is moving into the Senate after the legislation passed the House of Representatives, with hearings expected to put the practical impact on private businesses and investment structures under greater scrutiny.
The reform is scheduled to begin from July 1, 2028, leaving affected taxpayers with less than two years to assess their structures if the legislation passes.
