New Trust Tax Explained: The End of Family Trusts in Australia?

Family trusts in Australia is changing forever. From 1 July 2028, the government plans to introduce a 30% minimum tax on the taxable income of discretionary trusts. This could significantly reduce the benefit of distributing trust income to lower-tax family members, and it may also create serious issues for bucket companies. In this video, I explain how family trusts currently work, why the government is targeting discretionary trusts, how the new 30% minimum tax applies, and why bucket companies could be in trouble. Grown-Up Talk: The Fine Print DISCLAIMER - This video is for informational purposes only and should not be considered tax or legal advice. This video does not take into consideration your personal circumstances. Consult with a qualified financial planner, tax advisor or legal consultant before making any decisions regarding your situation. THANK YOU! I’ve done my best to research and share the most accurate information in this video. Anything insightful should be credited to the valuable sources and papers referenced, especially those from CCH. Any mistakes, however, are mine alone. As I'm here to learn and grow, I truly welcome your feedback. If I’ve missed something or made an error, please feel free to leave a comment below or email me at hannah.nguyen.taxsystem@gmail.com. And finally, life is short, and I’m grateful that you chose to spend some of your precious time watching this video and reading these words. Thank you. Time codes 0:00 Intro 0:17 What the new 30% trust tax means 1:40 A quick history of trust tax reform 2:40 Scenario 1, distribute to an adult child 4:22 Scenario 2, distribute to high-income earner 5:50 Scenario 3, bucket company 8:15 Exclusions from the new trust tax 9:19 Restructuring 11:00 No general grandfathering 12:15 Are family trusts still worth using?