ALP announces potential changes to trust taxation

Bill Shorten, The Leader of the Opposition, has announced that if Labor Government were to be elected, they will introduce a standard minimum 30% tax rate for discretionary trust distributions to 18 years and over.

The ALP recognises that many individuals and businesses use trusts for legitimate reasons, for instances business succession and asset protection, it is targeting those that use it purely for tax minimisation.

Labor’s policy will only apply to discretionary trusts, so other trusts – such as special disability trusts, deceased estates and fixed trusts – will not be affected by this change.

Labor’s policy will also not apply to farm trusts and charitable trusts, and other exemptions will apply, such as for people with disability (the Commissioner of Taxation will be given discretionary powers to manage this).