Australian Industry Group welcomes the opportunity to provide feedback on the proposed Minimum tax on discretionary trusts which comprises part of the broader capital gains tax (CGT) reform package introduced in the 2026-27 Federal Budget.

This submission specifically addresses proposed rollover relief for businesses which elect to restructure out of a discretionary trust into alternate arrangements.

The proposed minimum tax on discretionary trusts will impact a wide range of Australian businesses. According to ABS data, there were 494,000 active businesses operating through a trust structure at the end of 2024-25, accounting for 18% of all private sector business entities in Australia.

Australian Industry Group welcomes the Government's commitment to extend rollover relief to entities electing to transition from discretionary trusts, and commends the utilisation of existing SBBR mechanisms (with suitable modification) to ensure a simple process. However, to ensure rollover relief is extended in a genuine and comprehensive manner, issues relating to flexibility, simplicity and state-level duty relief must still be addressed.

We propose the following amendments to rollover relief arrangements to ensure genuine and comprehensive access by transitioning businesses:

1. Flexibility should be achieved by extending rollover relief to all entities transitioning out of a discretionary trust structure, with no limitation on the kind of company or partnership structures which are adopted.
2. Transition rules should be kept simple via the use of existing tax administration concepts to ensure administrative complexity and transaction costs are minimised.
3. The Commonwealth should engage with state and territory counterparts to secure corresponding relief from state-level transfer duties for entities which utilise rollover relief arrangements.