ACFA is supporting ACCI’s national campaign against the proposed 30% minimum tax on discretionary trusts, and we’re asking members to make their voices heard.
The Federal Government has proposed introducing a 30% minimum tax on discretionary trusts from 1 July 2028.
For many small and family businesses, discretionary trusts are not complicated tax arrangements. They are established business structures used for practical reasons, including asset protection, succession planning and managing family-owned businesses.
Through our work with the Australian Chamber of Commerce and Industry (ACCI), ACFA is supporting the Stop the Big Hit on Small Biz campaign and advocating for the Government to reconsider how this proposal could affect legitimate small and family businesses.
What could it mean for a small business?
ACCI estimates there are around 238,000 small businesses operating as discretionary trusts with business income, with a median net business income of just $74,700.
Under ACCI’s modelling, a small business trust earning that median income could face an estimated additional $9,212 in tax each year.
For a family business earning $175,000 and distributing income between three family members, ACCI’s example shows the additional annual tax could reach $26,236.
That’s money that could otherwise be going towards:
- Wages and employing people
- Machinery, tools and equipment
- Materials and stock
- Technology and business improvements
- Ioan repayments
- Working capital during quieter periods.
For cabinetmakers, manufacturers, designers and other small businesses in our industry, those are real business decisions.
ACFA and ACCI are advocating for small business
ACFA’s relationship with ACCI gives our industry a voice in national discussions that can directly affect the businesses we represent.
ACFA supports ACCI’s position and is joining its call for the Government to reconsider the proposed 30 per cent minimum tax on discretionary trusts.
ACFA supports ACCI’s call for an independent review of the proposal and, if it proceeds, for existing active small business trusts to be grandfathered or exempted.
Your voice can make a difference
We encourage ACFA members, particularly those operating through a discretionary trust, to support the campaign.
ACCI has prepared a letter template that you can personalise and send directly to your local Federal MP and Senators.
Tell them what this proposal could mean for your business.
If it could affect your ability to invest in equipment, employ or train staff, manage cash flow, plan for succession or reinvest in your business, those are the stories decision-makers need to hear.
How to contact your local MP or Senator
It only takes a few minutes to have your say:
- Visit Search Senators and Members and enter your postcode in the search field.
- Select your local Member or Senator from the search results.
- Select the Connect tab to find their email address.
- Download and personalise the letter template to explain what the proposed tax could mean for your business.
- Email your letter directly to your Member or Senator
The more small and family businesses that speak up, the harder it is for the practical consequences of this proposal to be overlooked.
ACFA will continue working with ACCI to represent the interests of our industry and ensure the voice of small business is heard.
Businsess should seek advice from their accountant or registered tax adviser about how the proposed changes may affect their individual business structure.
