‘ALP has never liked trusts’: Government denounced for rushing trust tax reform

While the government said it does not expect this election to trigger state and territory stamp duty, Hamilton said these issues are not resolved.

“There is still debate around what the implications are of changing a discretionary trust to a fixed trust because you’re effectively changing the beneficiaries. Does this trigger stamp duty or not? All of that is open for debate,” Hamilton told Accountants Daily.

“I put that down to the fact that the government has not dotted their i's or crossed their t's. The ALP has never liked trusts. To me it was pretty obvious that they were going to bring these changes in.”

According to the government’s exposure draft legislation explainer on the minimum tax on discretionary trusts, around 350,000 active small businesses operated through a discretionary trust structure in 2022–23. It said that of these, around 40 per cent are not expected to pay additional tax or need to restructure in any given year.

Hamilton said the proposed changes could have significant and practical implications on many small businesses that operate through a trust, especially for those who receive a distribution rather than a salary.

“There are operational implications for these businesses. They work extremely hard, and this avenue could be cut off for them if it becomes law,” he remarked.

Hamilton also criticised the short consultation period provided to respond to the draft legislation, which opened on 3 September and closed on 18 September 2026.

“Despite the potentially significant implications, there has not been a real consultation period for these proposed reforms. It’s just about getting it through. Two weeks of consultation on a decision you cannot reverse is not enough time for anyone to think properly.”

Having spent 40 years advising families, Hamilton said the most pertinent risks are ones “you cannot put a date on”, especially where there is a relationship breakdown, someone is subject to litigation, a business needs capital quickly.

“This election recognises two of those and ignores the rest. The list can only change if a beneficiary dies or the family breaks down,” he said.

“What happens to a grandchild born in 2031? I have read the draft, and I cannot tell you. Plenty of families set these structures up precisely to bring the next generation in over time, and they deserve an answer before they’re asked to commit.”

Hamilton said he is bringing these proposed changes to his clients’ attention and suggesting that they have their structures reviewed by their accountant to receive tax advice, adding that he is also working closely with his clients’ accountants.

“We’re alerting them that they’ve got a time period. Valuations on real assets are going to be necessary, and they should be talking to their accountant,” he said.

“But you should always wait for the final legislation. We’ve seen lots of changes proposed, and we could continue to see changes. We want to make sure that the optimal solution is provided for our clients given what’s been proposed by the government.”

CPA Australia recently released data which showed that taxpayers could incur up to $2.8 billion in professional advice costs just to determine how the discretionary trust regime could apply to them.