Built to Last: Structuring Your Business and Wealth for Australia’s New Tax Landscape

For decades, successful Australian families followed a familiar playbook: trade through a company or discretionary trust, distribute income across the family, park surplus profits in a bucket company, hold property for the long term and rely on the 50% CGT discount on exit. That playbook is being rewritten.

The 2026–27 Federal Budget delivered the most significant overhaul of investment and trust taxation in a generation. Some changes are already law, others are still being finalised, and Victorian business owners face additional state-level costs on top. For anyone running a business, holding investment property or building family wealth, structure has never mattered more.

What has already changed

Capital gains tax. From 1 July 2027, the 50% CGT discount for individuals and trusts will be replaced by cost base indexation, alongside a 30% minimum tax on capital gains for resident individuals. Gains accrued before that date keep the 50% discount, so documenting asset values at 30 June 2027 will be important.

Negative gearing. For established residential property acquired after 7:30pm on 12 May 2026, losses will no longer be deductible against salary or business income from 1 July 2027. Properties held before the announcement are grandfathered, and new builds remain eligible.

Small business. The small business CGT concessions remain, and the turnover threshold for the 50% active asset reduction rises from $2 million to $10 million from 1 July 2027. The $20,000 instant asset write-off is now permanent and loss carry-back has returned.

Superannuation. Since 1 July 2026, additional tax applies to earnings on super balances above $3 million, with a higher rate above $10 million, based on realised earnings only. SMSFs can also no longer take out new loans to buy residential property.

What’s on the horizon: the trust minimum tax

The proposal attracting most attention is a 30% minimum tax on discretionary trusts, intended to start from 1 July 2028. Draft legislation was released in September 2026 and is expected to be introduced into Parliament shortly. It isn’t law yet and details may change, but the direction is clear.

Under the draft, trustees would pay a minimum 30% tax on trust income. Individual beneficiaries would receive an offset, but corporate beneficiaries would not, meaning the traditional trust-to-bucket-company arrangement could face effective double taxation. Families distributing to adult children or a lower-earning spouse may see their overall tax bill rise.

Trustees are expected to have three broad pathways:

1. Stay discretionary and accept the minimum tax, which may suit families already distributing mostly to beneficiaries on higher rates.
2. Restructure into a company or fixed trust using rollover relief available between 1 July 2027 and 30 June 2030.
3. Make an election to fix distributions to nominated beneficiaries, preserving the trust but giving up much of its flexibility. If the election is later revoked, the minimum tax applies and it can’t be made again.

None of these is a default answer, and each involves long-term trade-offs for asset protection, succession and flexibility.

Why Victorian business owners need to look closer

The federal rollover relief covers income tax and CGT, not state duties. In Victoria, moving land or business assets between entities can trigger significant stamp duty, so any restructure needs careful modelling first.

Victoria’s land tax settings also weigh heavily on how property is held. The tax-free threshold is $50,000 for individuals and companies but just $25,000 for trusts, a surcharge applies to land held in most trusts, and the COVID debt levy remains until 2033. The entity holding an investment property can materially change its annual holding costs.

There are positives too. The payroll tax-free threshold is now $1 million for smaller employers, and stamp duty on commercial and industrial property is progressively being replaced with an annual property tax, changing the economics of buying business premises.

Compliance is the foundation

A well-designed structure is only as effective as the way it’s maintained. The ATO continues to focus on trust distributions, particularly where a beneficiary is allocated income but someone else enjoys the benefit. Resolutions must be made on time and in line with the trust deed, and loans between companies, trusts and family members properly documented.

A recent High Court decision changed how unpaid trust entitlements to corporate beneficiaries are treated, but the government intends to legislate the ATO’s previous position. Groups with large unpaid entitlements should review them now.

Now is the time to review

The next 18 months are a genuine planning window. Asset valuations at 30 June 2027, decisions about whether to restructure, and how future investments are held will all have long-term consequences.

Our team works with business owners, investors and families across Victoria to model the options and design structures that protect wealth, manage tax and support succession.

Contact PPT on (03) 5331 3711 or get in touch through our website to arrange a structuring review before these changes take effect.