Trust changes raise questions for local families
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MANY Yorke Peninsula families are asking whether trusts will still be worth having following Australian Government announcements about proposed changes to trust taxation.
Local lawyers say the concern is understandable, but the answer is more straightforward than many people realise.
The government has proposed a 30 per cent minimum tax on discretionary trust taxable income from July 1, 2028.
However, draft legislation has not yet been released, the measure remains subject to consultation, and significant backlash from legal and financial professionals means the changes may never become law.
Kylie Mildwaters, principal at YP practice Mildwaters Byrth Lawyers and Conveyancers, says the firm is careful to stay in its lane on this issue.
“The tax implications of these proposed changes are genuinely a matter for your accountant or financial adviser, and we would always refer clients to those professionals for that conversation,” Mrs Mildwaters says.
“What we can say clearly, from a legal and succession planning perspective, is that, irrespective of whether these changes become law, a trust may still be very worthwhile depending on your circumstances.”
Mrs Mildwaters says the non-tax benefits of trusts for succession planning remain substantial and unchanged by any proposed legislation.
These include, but are not limited to, protecting assets from estate claims, protecting vulnerable beneficiaries, providing flexibility in the distribution of wealth to beneficiaries and offering a legally sound framework for keeping farming operations intact across generations.
Primary production income is also exempt from the proposal as it currently stands, making the issue particularly relevant to many YP farming families.
“The proposed changes may reduce the tax benefits in some circumstances,” Mrs Mildwaters says.
“But there are many other reasons a trust can be the right structure for a family’s succession plan.”
Mildwaters Byrth works closely with clients’ accountants and financial advisers to ensure every plan is legally sound and properly coordinated.
Contact Mildwaters Byrth to arrange a consultation.
