Five things to know
For any family group, the result depends on four things: where the gain arises, where any loss sits, who finally receives the income, and whether each tax credit can actually be used.
- Growth to 30 June 2027 keeps the 50% discount. It stays discounted whenever the asset is sold. Growth after that date is adjusted for inflation instead, with no discount.
- Individuals pay at least 30% on later gains. People with other income above about $45,000 generally pay nothing extra. Students and retirees with little other income can pay more.
- Discretionary trusts would pay at least 30% from 1 July 2028. Beneficiaries whose own tax covers the 30% credit are largely unaffected. Low-income family members and bucket companies cost more.
- Where a loss sits now matters. Losses must be used against discounted gains first, and from 2028–29 a loss held in another trust can lose much of its value.
- Timing drives the answer. 2027–28 is the only year with the new CGT rules but no trust tax. Trustee decisions then face fixed deadlines in 2028–29 and on 30 June 2030.
Key dates
| Date | What happens | Status |
|---|---|---|
| 12 May 2026 | Budget night: negative gearing cut-off for established residential property | Law |
| 26 June 2026 | CGT changes become law | Law |
| 14 October 2026 | Trust tax Bill introduced | Bill |
| 29 October 2026 | Trust tax Bill passes the House of Representatives, without amendment | Bill |
| 13 November 2026 | Senate committee reports on the Bill | Scheduled |
| 1 July 2027 | New CGT rules start; assets valued at 30 June 2027 | Law |
| 2027–28 | Window year: new CGT rules, no trust tax | Law |
| 1 July 2028 | Trust minimum tax starts | Proposed |
| 2028–29 | Opt-out (EET) election year | Proposed |
| 1 July 2027 to 30 June 2030 | Restructure (rollover) relief window | Proposed |
How capital gains are taxed from 1 July 2027
One asset, two gains.
Assets held on 30 June 2027 are treated as sold and bought back that day. Nothing is payable then. When the asset is eventually sold, the gain is split in two: growth to 30 June 2027, which keeps the 50% discount, and later growth, which is adjusted for inflation and taxed in full.
Inflation adjustment or discount? This property grows about 4.5% a year against 3% inflation, so the new rules tax its later growth less than a 50% discount would. The new rules cost more once later growth is more than twice the inflation adjustment.
Valuation or formula. The 30 June 2027 value can be a market valuation or a formula set by the Government. Treasury’s draft formula compounds one daily growth rate from the purchase price to the sale price. You choose when you lodge the return for the year of sale, so both can be compared with the sale price known. A higher value is not always better: tax is lowest where the inflation adjustment absorbs all the later growth, and a valuation beats the formula only within a band of values. For significant property, a dated valuation near 30 June 2027 keeps both options open. The CGT calculator shows the band for your own figures.
The 30% minimum tax on capital gains for individuals
An individual pays a top-up when the extra tax on their gains after 1 July 2027 is less than 30% of those gains. The gain is treated as the top slice of income, so people already in the 30% tax bracket generally pay nothing extra.
| $50,000 later gain after inflation, 2027–28 rates | Other income | Extra tax on the gain | Top-up |
|---|---|---|---|
| Adult child at university, no Austudy or Youth Allowance | Nil | $5,252 | $9,748 |
| Part-time worker | $20,000 | $11,000 | $4,000 |
| Salaried employee | $100,000 | $16,050 | Nil |
| Age pensioner | Nil | $5,252 | Exempt |
Calculated before tax offsets and the Medicare levy. Anyone receiving the age pension, JobSeeker, Austudy, Youth Allowance, family tax benefit or another listed payment during the year is exempt. Growth to 30 June 2027 is outside the floor.
How capital losses are used under the new rules
Losses work harder against later gains.
Capital losses must be used against gains from before 1 July 2027 first, before the discount is applied. Against those gains, $1 of loss removes only 50 cents of taxable gain. Against later gains it removes the full $1. Taxpayers can no longer choose the better order.
How the proposed 30% minimum tax on discretionary trusts works
From 1 July 2028, the trustee of a discretionary trust would pay at least 30% on the trust’s net income, including capital gains. Each beneficiary other than a company receives a matching 30% credit for its share. The credit reduces the tax on the beneficiary’s whole taxable income, wages included, but it is not refunded or carried forward. It only helps a beneficiary whose own tax for the year is large enough to absorb it.
Not affected: fixed trusts, deceased estates, special disability trusts and super funds; primary production income, distributions to charities and DGRs, and income of genuine testamentary trusts.
| Who receives the income | What happens to the 30% credit | Result |
|---|---|---|
| Adult whose own tax covers the credit | Fully used | No extra tax overall; the trust pays it earlier |
| Family member with little other income | Partly used; the rest is lost | A $50,000 distribution costs $9,998 more |
| Bucket company | No credit | Taxed twice: 30% in the trust and again in the company, up to $60 per $100 |
| Another trust also in the regime | Used, and a credit passes on | Works, unless that trust’s losses shrink its income |
| A trust that has opted out | Used against its own tax only | Its beneficiaries get no credit |
$9,998 assumes no other income and includes the low income tax offset. The Medicare levy is payable either way.
Why about $32,500 of other income matters
The first $45,000 of anyone’s income is taxed at much less than 30%: about $3,750 in total. The credit assumes 30% on every dollar, so the first $45,000 carries a shortfall of about $9,750. Wages and other income outside the trust fill that cheap band and push the distribution into the 30% bracket, where its tax matches the credit. At about $32,500 of other income ($9,750 ÷ 30%), the credit is usually used in full.
For a business owner paid only by distributions, a genuine wage from the trust at a reasonable rate can therefore save around $10,000 a year under the proposed rules. Compare the two in the family planner.
Case study: a capital loss held in another family trust
Trust 2 holds a $300,000 capital loss. Trust 1 sells the property shown above and passes the gain to Trust 2, which passes it on to two adults on the top tax rate (47% with the Medicare levy). The sale price depends on the year of sale.
| Assumptions | Sold in 2026–27 | Sold in 2027–28 | Sold in 2028–29 |
|---|---|---|---|
| Sale price | $1,100,000 | $1,150,000 | $1,200,000 |
| Nominal gain (cost $600,000) | $500,000 | $550,000 | $600,000 |
| Inflation adjustment (3% a year on the $1,100,000 value at 30 June 2027) | – | $33,000 | $66,990 |
| Trust 1’s taxable gain before any loss | $250,000 | $267,000 | $283,010 |
| Rules that apply | Old rules | New CGT rules | New CGT rules and trust tax |
All years: $300,000 loss in Trust 2; family trust and interposed entity elections in place; inflation applied for each full year from 1 July 2027. 2028–29 results rely on the Bill as passed by the House of Representatives.
Trust 1 sells
Net capital gain $283,010
Pays 30% trust tax: $84,903
Passes an $84,903 credit on
Trust 2 applies its loss
Loss cuts net gain to $133,010
Own trust tax $39,903, covered
$45,000 of credit is lost
Two adults (47%)
Tax on $133,010: $62,515
Less usable credit: $39,903
Pay $22,612
Group tax $107,515. If Trust 1 opts out: $62,515.
- Before 1 July 2028 the loss keeps its full value. It comes off the growth to 30 June 2027 first, so it saves $70,500 in both 2026–27 and 2027–28.
- From 2028–29 the trust tax strands $45,000 of credit. Trust 1 pays $84,903 on its full gain, but Trust 2’s loss cuts the income that credit can be used against. After tax, the family keeps less from a $1,200,000 sale in 2028–29 ($492,485) than from a $1,150,000 sale a year earlier ($495,010).
- Opting out restores the value, at a price. If Trust 1 opts out, the loss is worth $70,500 again, but Trust 2’s share of all Trust 1’s future income becomes fixed. Trust 2 opting out on its own makes things worse.
The three options for a family trust from 1 July 2028
Stay in, opt out or restructure.
Every discretionary trust existing on 1 July 2028 would have three options. Opting out and restructuring cannot both be used, and doing nothing means staying in.
Stay in
- How it works
- Trustee pays at least 30%; beneficiaries get credits
- Key dates
- Automatic from 2028–29
- Suits
- Beneficiaries whose own tax covers the credit
- Main risk
- Credits wasted on low earners and companies
- Stamp duty
- No change
Opt out (EET election)
- How it works
- Nominated beneficiaries take fixed, matching shares of all income and capital gains, every year
- Key dates
- Elect in 2028–29; notify the ATO by the earlier of the return due date and lodgment
- Suits
- Families with a stable, predictable distribution pattern
- Main risk
- Any departure: top rate plus Medicare on all net income that year, then back in the regime; cannot be remade
- Stamp duty
- The WA Treasurer has indicated the election alone will not trigger transfer duty
Restructure (rollover)
- How it works
- All required assets move to one company, fixed trust or individual; income tax is deferred
- Key dates
- Transfers between 1 July 2027 and 30 June 2030
- Suits
- Groups needing a company, or relying on a bucket company
- Main risk
- Relief reversed if a required asset is missed or discretion returns within about four years; losses stay behind
- Stamp duty
- Not covered; transfers may be dutiable
Opting out to save a loss
Set the nominated shares by the family’s long-term needs, then test the effect on any loss. A share chosen to suit one sale fixes how all future income is split, and a nomination shaped mainly to absorb a loss invites section 100A and Part IVA questions. Test the fit in the opt-out check.
Terms used in this explanation
- Discretionary (family) trust
- A trust where the trustee decides each year which beneficiaries receive income and capital.
- Indexation
- Increasing the cost base by inflation (CPI) so that only growth above inflation is taxed. It replaces the 50% discount for growth after 30 June 2027.
- 30% minimum tax (CGT)
- A top-up so that a resident individual pays at least 30% on capital gains from after 1 July 2027.
- Trust minimum tax
- The proposed 30% tax paid by the trustee of a discretionary trust on its net income from 1 July 2028, with a matching non-refundable credit for beneficiaries other than companies.
- Non-refundable credit
- A credit that reduces the beneficiary’s tax for the year to nil but no further; any excess is lost.
- Excluded election trust (EET) election
- The proposed opt-out: the trust fixes each nominated beneficiary’s share of all income and capital, permanently, in return for staying outside the trust minimum tax.
- Apportioning method
- The Government formula, in draft, that can be used instead of a valuation to set the 30 June 2027 value of real property and assets without a market price.
Common questions about the CGT and trust tax changes
Do I have to sell before 1 July 2027 to keep the 50% CGT discount?
No. Growth up to 30 June 2027 keeps the 50% discount whenever you sell. Only growth after that date is taxed under the new rules.
Is my home affected by the CGT changes?
The main residence exemption continues, so a home that has only ever been your home is generally unaffected. Homes that have been rented out, or used to produce income, need checking.
Should we wind up our family trust because of the trust tax?
Not yet. The trust tax is still before the Senate, and the right answer depends on the beneficiaries, the assets and WA transfer duty. We will model staying in, opting out and restructuring once the law is final.
Can a family trust keep distributing to adult children at uni?
Yes. But if the trust tax is enacted, the trust pays at least 30% on that income from 2028–29, and a student with little other income is likely to lose much of the matching credit, because it is not refundable.
Is a bucket company still worth it under the trust tax?
If the trust tax is enacted, income distributed to a company from 2028–29 is taxed twice: 30% in the trust and again in the company, because companies get no credit. The structure needs review before then.
Are existing capital losses still useful after 1 July 2027?
Yes, but where the loss sits and the year of sale now make a large difference. Losses are used against discounted pre-2027 gains first, and from 2028–29 a loss in a second trust can strand part of the 30% credit.
Do I need a valuation of my assets at 30 June 2027?
Not for every asset, and the law does not require one. For significant property or private business assets, a dated valuation keeps the choice open between a valuation and the Government formula when you sell. Listed shares need none, because their market value is on the public record.
Will the trust tax definitely start on 1 July 2028?
Not yet. The Bill passed the House of Representatives on 29 October 2026 without amendment and is before the Senate, whose Economics Legislation Committee reports by 13 November 2026. It can still change or fail.
What we will do for each family group
Confirm assets, cost bases and planned sales. Record capital losses by entity. Arrange 30 June 2027 valuations for significant assets.
Map entities, beneficiaries and elections, including when each family trust election started relative to any capital loss. Review trust deeds. Model staying in, opting out and restructuring. Get WA duty advice before any change.
Make and notify any opt-out election. Check every year that distributions match the nomination.