Your business is in a family trust. What is proposed for 2028
A minimum 30 per cent tax on discretionary trusts is proposed from 1 July 2028 and is not yet law. What that means for a sale, and for what a buyer sees.
General information only, not financial, legal or taxation advice. Tony Pope holds Queensland Office of Fair Trading licence 4963575.
The short version
- A minimum tax of 30 per cent on discretionary trusts is proposed to start from 1 July 2028. The ATO's own page on it says the measure is not yet law.
- This is about how trust income is taxed, not about whether you can sell. Selling a trust-held business is ordinary.
- The small business CGT concessions were confirmed as remaining, and they are usually the larger number in a sale.
- Do not restructure because of a headline. Restructuring has its own tax consequences and can affect eligibility for concessions.
A large share of Australian small businesses sit inside a discretionary trust. If yours does, you may have seen that a minimum tax of 30 per cent on discretionary trusts is proposed to begin from 1 July 2028.
Get the status right before you act on it. This is an announced measure, not enacted law. The ATO's own page on it says in terms that the measure is not yet law, and the detail can move between announcement and legislation. It deserves a conversation with your accountant. It is not, on its own, a reason to sell, restructure or panic.
Here is the part that is actually about selling a business.
Selling a trust-held business is ordinary
Nothing about a trust stops a sale. The trustee sells the business assets, the contract is signed by the trustee, and the proceeds land in the trust to be dealt with under the deed.
Buyers see trust-held businesses constantly. Their solicitor will want to read the deed, check the trustee has power to sell, confirm who the appointor is and satisfy themselves that whoever signs can sign. That is a due diligence item, not an obstacle.
If your trustee is a company, which is common, they will also want the company records in order. If your trust deed has been amended over the years and the amendments are in a filing cabinet somewhere, find them now. Missing deed amendments are a genuinely common cause of delay near settlement, and they are tedious to reconstruct under time pressure.
What the proposed 2028 change is and is not
It is a proposed change to how trust income is taxed going forward. It is not a tax on selling. It does not reach back and change what has already happened.
What it may do is change the arithmetic on holding a business in a trust over a long horizon, which is a different question from what your business is worth to a buyer today. A buyer is purchasing the business, not your structure. Two identical businesses, one in a trust and one in a company, are worth the same thing to the person buying them.
Where structure shows up in a sale is in your net proceeds, not in the price.
The concessions are the bigger number
This is the part that gets lost when headlines are about trusts.
The small business capital gains tax concessions have been confirmed as remaining. There are four of them, and for an owner selling a business they have held for a long time they can be worth a very great deal, in some cases eliminating the tax on the gain entirely.
The threshold for the fifty per cent active asset reduction is set to rise from $2 million to $10 million of turnover from July 2027, which brings a substantially larger group of businesses into scope than before.
There is also a lifetime cap on contributions to superannuation made under these concessions, indexed each year. For 2025 to 2026 it was $1,865,000.
Every one of those numbers matters more to what you actually receive than the trust rate does. And every one of them has eligibility conditions that the tax office looks at closely.
Why restructuring on a headline is a bad idea
Moving a business from one structure to another is itself a capital gains tax event. It can trigger stamp duty. It can reset holding periods that matter for the concessions. It can, done at the wrong moment, cost you access to a concession worth several hundred thousand dollars in order to avoid a rate change worth considerably less.
There is rollover relief available for three years from 1 July 2027 to help businesses that want to restructure, which is a signal that the government expects some to. That is worth knowing about. It is not a reason to act before you have modelled it.
The order of operations is: your accountant models your actual position, you look at the numbers, then you decide. Not the other way around.
What to do this year
If a sale is somewhere in the next few years:
- Find the trust deed and every amendment. Put them in one place. This alone saves a fortnight later.
- Confirm who the trustee, appointor and beneficiaries are, and that the register matches reality.
- Ask your accountant to model the sale under the concessions, using your real numbers rather than a rule of thumb.
- Ask specifically whether you qualify, and what would have to change if you do not.
That last question is the valuable one. Some eligibility tests turn on things you can influence, and some of them take time. Finding out two years before a sale is useful. Finding out two weeks before settlement is not.
The honest version
Trust taxation is changing and it is worth understanding. It is not a reason to rush a sale, and it is not something a buyer will pay less because of.
What a buyer pays for is the business. What your structure decides is how much of that you keep. Those are two separate problems and they are solved by two different people.
Common questions
Can I sell a business that is held in a family trust?
Yes, and a great many Australian small businesses are held this way. The sale is normally structured as a sale of the business assets by the trustee, and the proceeds are dealt with under the trust deed. What differs from a company sale is the tax treatment of the gain and how the proceeds are distributed, which is your accountant's territory rather than your broker's.
Should I move my business out of a trust before selling?
Not on general principle, and not because of a headline about trust taxation. Moving a business between structures is itself a capital gains tax event and can affect eligibility for the small business concessions, which are often worth far more than the difference you are trying to avoid. This is a question for your accountant with your actual numbers in front of them.
Do the small business CGT concessions still apply to trusts?
The government has confirmed the existing small business CGT concessions are being retained, and the turnover threshold for the fifty per cent active asset reduction is set to rise from $2 million to $10 million from July 2027. Eligibility depends on your circumstances and the ATO scrutinises these claims, so get it confirmed rather than assumed.
Keep reading
All notes on selling a business · All seller guides · What is my business worth?
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