Flawed Trust Tax Bill Threatens Small Business Closures Without Senate Fix
Australia’s small and family business sector faces a multi-billion-dollar compliance shock and potential closures unless Parliament passes targeted relief to fix the Government’s discretionary trust tax reforms.
Pitcher Partners is calling on Parliament to enact crucial amendments to the Minimum Trust Tax Bill before final passage, warning that the current drafting traps family businesses between crippling restructuring costs and double taxation.
Conservative estimates by CPA Australia indicate that physical restructuring will drain $1 billion to $2.5 billion from Australian businesses in basic professional fees—excluding state stamp duties, asset/employee transfers, and banking re-negotiations. Taxpayers will also require advice on whether to restructure even if they choose not to do so.
“Where a group has genuine existing tax losses, those losses should be allowed to be used under the new regime on a transitional basis. Otherwise, groups face double taxation, paying minimum tax on income while genuine losses already sitting elsewhere within the group remain trapped. Unless there is transitional relief, many businesses will not be able to fund existing projects and will be forced to close, causing a disastrous effect on the economy and small business.”
— Alexis Kokkinos, Executive Director, Pitcher Partners
Key Summary: Proposed Compliance Burden vs. Industry Solution
| Key Metric / Area | Current Reform Proposal | Pitcher Partners’ Solution & Impact |
| Restructuring Cost | $1.0B to $2.5B+ before state duty across 105k+ trusts. | Targeted statutory amendments preserve capital for business operations and regional projects. |
| Existing Tax Losses | Trapped losses attract minimum tax when income is distributed. | Transitional loss relief prevents double taxation and forced business closures. |
| EET Alternative | Creates long-term stamp duty & trustee fiduciary liabilities. | Non-refundable offset via corporate beneficiary removes 30-year legal uncertainty for family trusts. |
A Practical Legislative Path Forward
Pitcher Partners confirmed it has supplied Government and Treasury with ready-to-implement statutory amendments. The required changes do not involve abandoning or fundamentally redesigning the Government’s policy, but rather making targeted adjustments to corporate beneficiary offset rules and transitional loss rules.
“The consultation process has occurred. The issues have been identified and detailed amendments have been put forward. What is needed now is for those issues to be addressed in the legislation before the Bill passes Parliament. We can preserve the integrity of the Government’s reforms without imposing costs on taxpayers that can be avoided.”
— Alexis Kokkinos
Media Contacts & Enquiries
Alexis Kokkinos | Executive Director, Pitcher Partners
Pitcher Partners Media Relations
Email: [email protected]
