Australian Industry Group welcomes the opportunity to provide a submission to the Senate Economic Legislation Committee on the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 202. These bills implement the proposed minimum tax on discretionary trusts, which comprises part of the broader package of capital gains tax (CGT) reform introduced in the 2026-27 Federal Budget.

Summary of recommendations

Uncertainty regarding whether state-level transfer duties will apply to entities utilising the new Excluded Election Trust (EET) mechanism should be resolved before the bill is pass by parliament. The Commonwealth should work with state governments to resolve this ambiguity. This may require extending the window during which EET elections can be made beyond the 2028-29 income year.
State-level transfer duties should not be applied to businesses transitioning out of discretionary trusts under federal roll-over relief. Despite the introduction of the new EET mechanism, the Commonwealth should work with state governments to secure a duty exemption for other protected rollovers as well.
A substantive set of ‘family change provisions’ should be developed that identifies all appropriate circumstances in which EET nominations can be changed. This will ensure that births and other relevant family changes are recognised as legitimate grounds for variations, alongside the death and relationship breakdown circumstances currently identified in the bill.
Continuity requirements for the roll-over of non-family discretionary trusts should be defined and included in the bill. This has been a known issue since the July Treasury consultation paper and requires resolution. Deferring these requirements to a subsequent legislative instrument leads to uncertainty for affected entities and should be resolved now.