Trusts paper confirms tax and complexity hit for small business

Media Release: 8 July 2026

The federal government’s consultation paper on taxing trusts confirms that hundreds of thousands of small businesses will be hit with higher taxes and significant restructuring costs.

Responding to the paper released today, the Australian Chamber of Commerce and Industry (ACCI) says around 350,000 active small businesses rely on discretionary trusts to provide asset protection for family enterprises.

This includes local tradies, corner stores and cafes, and professional services such as lawyers, accountants and surveyors.

ACCI Chief Executive Officer Andrew McKellar says the change will impose a serious tax penalty on Australia’s small businesses.

“The government’s increase in tax on discretionary trusts is set to raise more than $40 billion over ten years, and for the many SMEs that utilise the trust structure, it will negatively impact on their operations and viability,” Mr McKellar said.

“The first hit will be to their ongoing tax bills — they either stay as a trust and pay higher tax or move to a company structure and also pay higher tax.

“The second hit will be the extensive costs to businesses that are effectively forced to restructure — accountants fees, legal advice fees, financial advice — not to mention the serious costs in time and stress.

“State governments also stand to receive a windfall gain from the stamp duty on property and other assets transferred from the trust to the new corporate structure.”

Mr McKellar said the new taxes come at a time when the economy is slowing, business investment is struggling and productivity remains very weak.

“The assumption that our economy requires a higher tax burden on small businesses is wrong. If anything, our future economic prosperity needs a more supportive tax environment for businesses to drive jobs, growth, and innovation.” Mr McKellar said.