What the new trust tax means for a family business handover.
The federal budget sets a minimum 30 per cent tax on income paid out by discretionary trusts, the structure many family businesses run through. It starts in July 2028.
Draft legislation offers one way around it. A trust can lock in a fixed share of income for each beneficiary. After that, the split can only change on a death or a divorce.
On 4 September 2026, The Australian reported that state revenue offices could not rule out charging stamp duty on trusts that make the switch. Gabe was asked what the rules mean for the owners we work with.
“Most of the owners we work with just won’t elect. Succession hardly ever goes to plan. A structure like this that only survives if nothing changes is not much use to anyone planning the handover of the most valuable thing they own, with all of the uncontrollable variables that go along with it.”
Gabe Enslin, co-founder of Adapt, in The Australian
He called the rules “bloody hard” for everyday Australians to make sense of, and pointed to the ordinary moves in a handover that would break the election.
“Want to bring the kids in? Hand a share to the manager who’ll run it when you step back? Bought out a partner? If any of that goes through the trust, you’ve changed who it pays, and the exemption is one-way.”
“Best case you’re on the 30 per cent floor for good. Worst case, the year it happens is taxed at the top marginal rate. Either way you can never elect again.”
Gabe Enslin, co-founder of Adapt, in The Australian
“It feels like it will penalise the thing it claims to protect.”
Gabe Enslin, co-founder of Adapt, in The Australian
This is general commentary. Talk to your accountant before you change a trust.