Urban Taskforce Australia understands that the Federal Government intends to impose a 30 per cent minimum tax on discretionary trusts from 1 July, 2028. This is extremely concerning.
While the idea behind this proposal appears to be to prevent high-income and high-wealth taxpayers from using discretionary trusts to minimise tax through income splitting, there will be unintended consequences from this decision for small businesses using trusts for legitimate economic activities.
This includes our sector, in which trusts allow property developers to manage and offset their losses on projects against other revenue, as shareholders are permitted to do with shares.
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