"On 30 July 2017, Opposition leader Bill Shorten announced that a Labor Government, if elected, would introduce a standard minimum 30% tax rate from 1 July 2019 for discretionary trust distributions to mature beneficiaries over age 18. In circumstances where the minimum tax rate on discretionary trust distributions is lower than what would be paid under the normal marginal tax scales, the higher rate would apply." There are similarities with the franking credits policy, but some important differences. The trust isn't taxed, but taxed in hands of recipients as per usual. If profits retained, and I could be wrong, but tax at the highest marginal rate. 30c minimum only applies to discretionary trusts. So, if you think about it, it closes off one of the major advantages. Kid hits 18, he doesn't suddenly have the ability to start taking money at a very concessional rate. Double taxation? No, but a minimum of 30c. I dont have as many problems with this one, it is much harder to get around, and let's face it, it is mostly used for tax minimisation, and it is rare that poor people use them. Fixed trust ok, but that involves you giving the kid control and ownership of their share? It may, but I'm not sure, make it an asset subject to family law attack.
Anyone with a family trust or any discretionary trust of any kind,should be making an appointment with their accountant ASAP after a Labor win, to check whether I'm talking thru my ar*e or not. Probably worth putting them on notice that you will be doing that, makes them study up on it before you arrive. I would be surprised if the senate knocked this one back. cheers
