Council Warns Small Businesses of Potential Tax Shock Under Labor’s Trust Reforms

Labor’s proposed trust tax reforms, including a 30 percent tax on trust income starting July 1, 2028, could impose substantial tax bills on small family businesses. COSBOA CEO Skye Cappuccio has warned that the new rules are “too harsh.” The government intends for this measure to close tax loopholes and increase fairness, as family trusts currently allow trustees to distribute income to family members, often lowering the overall tax burden.

• Labor’s proposed trust tax reforms could result in significant tax bills for small family businesses.
• The government plans to introduce a 30 percent tax on discretionary trust income from July 1, 2028.
• COSBOA CEO Skye Cappuccio stated the new rules are “too harsh for most businesses to consider.”
• The measure aims to close tax loopholes and promote tax system fairness.
• Family trusts allow trustees to distribute income to family members, which can legally reduce tax obligations.