Some comments on the trust tax changes proposed in the 2026-27 Federal Budget

On 12 May 2026, the Federal Government released the document titled ‘Budget 2026-27: Minimum tax on discretionary trusts’ (the ‘Tax Explainer’) to explain the reasoning behind the proposed 30% minimum tax rate for trusts – and key aspects of how the minimum tax rate will apply. In seeking to understand how these presently proposed and unlegislated Budget changes may affect operation of discretionary trusts, at this stage, we can only rely on the Tax Explainer and the expressed underlying policy of the changes. Comments on tax policy context of trust changes The ‘Tax Explainer’ seeks to justify the announced changes on policy grounds...