CPA Australia warns proposed minimum tax on discretionary trusts may impose significant costs on small and family-run enterprises.
CPA Australia has called on the federal government to review its proposed minimum tax on discretionary trusts, arguing it will disproportionately affect small and family businesses. The professional body estimates the measure could impose “significant and unnecessary costs” on firms using trusts for legitimate operations, potentially totaling $1bn in compliance expenses.
The proposal targets discretionary trusts, which many small businesses use as long-standing structures to manage operations and protect family assets. CPA Australia Tax lead Jenny Wong noted these arrangements were established in good faith under existing laws, and abrupt changes could undermine tax system certainty.
Wong added that restructuring trusts is a complex, multi-disciplinary process requiring coordination among accountants, lawyers, and other professionals. The group urged the government to ensure any tax response is proportionate to the scale of the issue.