Have your say: proposed changes to discretionary trust taxation

21 July 2026

Our submission to Treasury will aim to ensure that any legislative changes recognise the realities of operating a small business in the building and construction industry.

The Australian Government has released a public consultation on the proposed implementation of a 30% minimum tax on discretionary trusts, with feedback sought before the legislation is finalised. The proposed reforms are intended to commence from 1 July 2028, however the detailed design of the measure is currently open for consultation.
 
For many AMCA members, discretionary trusts are not established primarily for tax planning purposes. Rather, they are a long-standing and legitimate business structure that provides important benefits including asset protection, succession planning, commercial flexibility and risk management—particularly for small and family-owned businesses operating in the construction and mechanical services sectors.
 
AMCA is concerned that, unless appropriately designed, the proposed changes may have unintended consequences for genuine small businesses that use discretionary trusts as part of normal commercial operations.
 
Mechanical contracting businesses operate in high-risk environments, where trust structures have been adopted on professional advice to separate business risk from personal and family assets. Any reforms should carefully distinguish between aggressive tax planning arrangements and legitimate business structures that support Australia's small business community.

AMCA will make a submission to Treasury on behalf of members

Our submission will focus on ensuring that any legislative changes appropriately recognise the realities of operating a small business in the building and construction industry. We will advocate for reforms that maintain fairness while preserving legitimate commercial structures used by contractors, consultants and other small businesses for asset protection and business continuity.

The consultation paper itself acknowledges that a number of important design questions remain unresolved, providing stakeholders with an opportunity to help shape the final legislation.

Your experience matters

To ensure AMCA's submission is supported by practical, evidence-based examples, we are seeking feedback from members who currently operate through discretionary trusts or who expect to be impacted by the proposed reforms.

 
We are particularly interested in hearing about:
  • How your trust structure supports the operation of your business beyond taxation.
  • The asset protection or commercial risk management benefits your structure provides.
  • The potential financial or administrative impacts of the proposed changes.
  • Any restructuring costs or practical difficulties your business may face.
  • Examples of how the reforms could affect investment, employment, business growth or succession planning.
Real-world examples and quantitative information will significantly strengthen AMCA's submission and assist Treasury in understanding the practical implications for Australia's mechanical services industry.
 
If you would like your experiences to be considered as part of AMCA's submission, please send your feedback to [email protected] before the consultation closes.
 
AMCA appreciates the ongoing engagement of our members and remains committed to ensuring the interests of Australia's mechanical services industry are effectively represented throughout this consultation process.