Trusts are commonly used for property ownership, business structures and asset planning across Australia. The proposed 2026 reforms introduce changes that affect trust-held property from multiple directions simultaneously.
The Federal Budget material also refers to a 30% minimum tax rate for discretionary trusts from 1 July 2028, with some exceptions and rollover relief for certain restructures. This is in addition to the CGT changes and negative gearing restrictions that affect trust-held property from 1 July 2027.
Property held in trusts may require review because: CGT rules are changing, capital gains may be distributed to beneficiaries who are also subject to minimum tax rules, negative gearing treatment may change for trust-held residential property, losses may be trapped or quarantined within the trust, trust deeds may need to be reviewed, beneficiary tax positions determine the after-tax outcome, and restructuring a trust to move property can itself trigger CGT.
The key message is not to make assumptions. Trust treatment depends heavily on the trust deed, the identity and tax position of beneficiaries, the type of trust, the type of property held, how income and capital gains are distributed, and the final form of the legislation.
In our experience working on properties held in trusts, the depreciation and capital works records are often more difficult to retrieve than for individually-owned properties, because the property ownership has sometimes changed without a transfer of the property file.
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