Part seven of Nexia’s series on the new CGT reforms and the proposed 30% minimum tax on trustees of discretionary trusts considers the practical impact of tax reform and company taxation.
Throughout this series, we’ve explored how the proposed tax reforms could affect company structuring, trusts, CGT changes and long-term wealth planning.
A question that naturally follows is:
“Do I need to change my company structure?”
For many business owners and investors, the answer is reassuringly simple:
Not automatically.
The proposed reforms do not mean every company structure suddenly becomes ineffective. In fact, many existing structures may continue to serve their intended purpose. The key question is whether your current arrangements still support your financial, tax, and succession planning objectives.
That means looking beyond tax outcomes alone and considering factors such as asset protection, succession planning, flexibility and long-term wealth creation.
The wrong question may be “What should I change?”
One of the risks with any major tax reform is that people assume change is required simply because new rules are being proposed.
In reality, the better question is:
“Does my current structure still achieve my goals?”
For some business owners, the answer will be yes.
For others, the proposed tax reforms may highlight opportunities to improve outcomes through restructuring or simplifying existing arrangements.
The objective should not be change for the sake of change.
Instead, the objective should be ensuring that your structure remains fit for purpose.
What should business owners be reviewing?
When assessing whether a company structure remains appropriate, it can be useful to revisit some fundamental questions:
- What was the original purpose of the structure?
- Does it still meet asset protection objectives?
- Does it support succession and estate planning goals?
- Is it still tax-effective under the proposed framework?
- Does it allow flexibility for future family wealth planning?
- Are there opportunities to simplify ownership arrangements?
- Is the company used as a beneficiary of a discretionary trust or a unit trust?
Many company structures have evolved over decades through acquisitions, business growth, succession events and tax planning exercises.
The proposed tax reforms provide an opportunity to step back and assess whether the current structure still reflects where the family or business is heading.
A potential restructuring window may create opportunities
The proposed reforms are expected to significantly change the way capital gains (from 1 July 2027) and trust income (from 1 July 2028) are taxed. As outlined throughout this series, these changes may affect how families, business owners and investors structure and hold their assets.
One of the more significant concepts currently being discussed is the possibility of a three-year restructuring window for certain discretionary trusts from 1 July 2027.
In October 2026, the Australian Government introduced legislation into Parliament for the proposed 30% minimum tax on discretionary trusts, including the above restructure. The legislation has not yet been passed by Parliament.
While the legislation is still evolving, current rules indicate there may be opportunities for taxpayers to restructure ownership arrangements during a transitional period.
For some families and business owners, this could create opportunities to address historical issues that may previously have been too costly or complex to resolve.
Importantly, the goal would not necessarily be to move assets immediately, but to understand which options may become available if the reforms proceed as currently contemplated.
What restructuring opportunities may be available?
Depending on individual circumstances, planning discussions may involve strategies such as:
- Rolling assets from discretionary trusts into a company structure or a fixed unit trust structure and in the period 1 July 2027 to 30 June 2030
- Moving shareholdings into more appropriate ownership vehicles
- Simplifying trust-to-company ownership arrangements
- Addressing legacy structures that no longer align with family objectives
- Positioning assets for future succession and wealth transfer planning
However, there is no universal strategy that applies to everyone.
Professional advice will remain essential when considering any restructuring options. Tax, legal and state-based duty implications can vary significantly depending on individual circumstances, so any decision should be carefully considered before action is taken.
In some situations, the proposed rules may provide alternatives that reduce the need for significant restructuring.
For example, in October 2026, the Australian Government introduced legislation that included a new “Excluded Election Trust” election regime, through which some existing trustees of discretionary trusts may be able to avoid the 30% minimum tax without formally restructuring.2
Trustees should seek tax advice tailored to their circumstances when considering these proposed options. Separate legal advice may also be required, including in relation to any state or territory duty implications.
Understanding these options early can help families and business owners make more informed decisions as the reforms develop.
This is why restructuring decisions should always start with objectives rather than technical solutions.
The biggest opportunity may be simplification
One theme emerging from discussions around the proposed reforms is the value of simplicity.
Over time, successful families often accumulate multiple trusts, companies, investment entities and ownership arrangements.
While each structure may have made sense when it was created, the overall picture can become increasingly complex.
The proposed tax reforms may provide an opportunity to ask:
- Are all these entities still required?
- Have our objectives changed?
- Does the current structure create unnecessary administration?
- Are there more efficient ways to achieve the same outcome?
In some cases, the most valuable restructuring may not be about tax savings at all. It may simply be about creating a structure that is easier to manage and more aligned with future family goals.
Doing nothing may still be the right answer
It is equally important to recognise that a review does not automatically lead to change.
Many existing company structures may continue to deliver strong outcomes under the proposed tax reform framework.
In those cases, the most appropriate strategy may simply be to understand the implications of the tax reforms and continue with the existing structure.
A successful review should provide confidence, whether the conclusion is to restructure or to stay the course.
The focus should be planning, not reacting
The proposed tax reforms are creating understandable uncertainty for business owners and investors.
However, uncertainty does not automatically require action.
The most valuable step for many families will be understanding what they currently own, how those structures interact and whether they remain aligned with long-term objectives.
Those who undertake that review early are generally better positioned to identify opportunities if and when they arise.
How Nexia can help
Is it time to review your structure?
If you operate through companies, trusts or investment structures, now is a good time to understand how the proposed tax reforms could affect your arrangements and whether your current structures remain aligned with your long-term goals.
The proposed tax reforms may ultimately create restructuring opportunities, but the greatest value often comes from understanding your options before decisions become urgent.
Nexia’s tax specialists can help you understand the proposed reforms, assess potential impacts and identify opportunities that may be available to you and your family group. Contact your local Nexia Advisor to discuss your circumstances.
Important: This article is based on legislation and draft rules as proposed at the time of writing. Future government policy, legislation and the outcome of the next Federal Election may result in changes. The information provided is general in nature and should not be relied upon as a substitute for professional advice. Please seek advice tailored to your individual circumstances.
