Trust Distribution Tax Calculator: Today vs the Proposed 30% Minimum
The 2026–27 Federal Budget proposes a 30% minimum tax on discretionary (family) trusts from 1 July 2028. Trustees would pay at least 30% on the trust’s taxable income, no matter how it is distributed — and the popular “bucket company” strategy would no longer work the same way. This tool compares the tax on your trust distributions under today’s rules against the proposed rules, so you can see the gap and start planning your three-year restructuring window.
- Compare current marginal-rate tax vs the proposed 30% floor
- Model up to four family beneficiaries plus a bucket company
- See exactly which distributions get caught by the floor
- Shows the extra tax per year under the new rules
- Runs entirely in your browser — nothing is sent anywhere
- Built by a Registered Tax Agent who structures family trusts
Trust Distributions — Current vs Proposed Rules
Enter how you’d split this year’s trust income. We’ll show both tax outcomes.
How the calculator works
Split the income. Enter how you’d distribute this year’s trust income across family members and (optionally) a bucket company, with each person’s other income.
We model both rule sets. Today’s marginal-rate tax versus the proposed 30% floor on every distribution, with the bucket company benefit removed.
See the gap. The extra tax per year shows whether your structure needs a rethink during the three-year transition window.
The two rule sets, side by side
| Feature | Current rules (until 30 June 2028) | Proposed rules (from 1 July 2028) |
|---|---|---|
| Tax on distributions | Taxed at each beneficiary’s marginal rate | A 30% minimum applies; higher marginal rates still apply above that |
| Low-income beneficiaries | Can be taxed well below 30% (or nil) | Effective 30% floor — the benefit of splitting to low earners shrinks |
| Bucket company | Caps tax at the company rate (25% or 30%) | Corporate beneficiaries miss out on the credit — the strategy no longer works the same way |
| Who pays | Beneficiaries, via their returns | Trustee pays the 30% minimum; non-corporate beneficiaries get non-refundable credits |
| Testamentary trusts | Concessional tax for minors etc. | Income from assets held at 12 May 2026 is excluded |
| Primary production / vulnerable minors | Existing rules | Excluded from the 30% minimum |
Rates modelled: 2025–26 resident marginal rates (0 / 16 / 30 / 37 / 45%) plus the 2% Medicare levy. The 30% minimum is modelled as an effective floor on each distribution, reflecting the non-refundable credit mechanism. Fixed trusts, widely held trusts, charities, complying super funds, special disability trusts and deceased estates are excluded from the measure.
Frequently asked questions
Is this change law yet?
No. It was announced in the 2026–27 Federal Budget and is proposed to start on 1 July 2028. Legislation has not passed and the detail may change. The point of planning now is that you have a three-year window — with rollover relief available from 1 July 2027 — to restructure if it makes sense.
How does the 30% minimum actually work?
Under the proposal the trustee pays a minimum of 30% on the trust’s taxable income, regardless of how it is distributed. Non-corporate beneficiaries receive a non-refundable credit for that tax. In practice, distributions that would have been taxed below 30% are effectively topped up to 30%, and the excess credit cannot be refunded.
Why does the bucket company stop working?
Today, distributing surplus income to a bucket company caps the tax at the company rate (25% or 30%). Under the proposal, corporate beneficiaries do not receive the non-refundable credit, so the 30% minimum effectively applies and the deferral advantage is lost.
Does this affect every trust?
No. Fixed trusts, widely held trusts, charitable trusts, complying super funds, special disability trusts and deceased estates are excluded. Primary production income, income for certain vulnerable minors, and income from assets held by a testamentary trust at 12 May 2026 are also carved out.
Should I wind up my trust?
Not on the strength of this tool. Trusts also provide asset protection, succession flexibility and other benefits that tax alone does not capture. Restructuring has its own costs — CGT, stamp duty, legal and lending changes. The right answer depends on your whole picture, which is exactly what we can work through together.
How accurate is the figure?
It is a careful estimate using published marginal rates and a simplified Medicare levy. It does not model franking credits, the low income tax offset, every carve-out, or your specific trust deed. Treat it as a guide to the size of the gap, not a final tax calculation.
Run your trust through a proper review
If the proposed rules add meaningfully to your tax, you have a window to act — with rollover relief available. Book a 30-minute chat and we’ll model your real distributions, weigh up a restructure, and protect what your trust was set up to do.
Book a 30-minute chat Explore tax planning
Built by Ramy Hanna, Principal of Trinity Accounting Practice — Registered Tax Agent, Fellow IPA, TIA & NTAA.
Trinity Accounting Practice · 159 Stoney Creek Road, Beverly Hills NSW 2209 · trinitygroup.com.au
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