Family and business trusts could soon have to pay more tax
Proposed trust tax changes could see wealthy Australians and family businesses pay tax rates closer to ordinary workers.
womensagenda.com.auHere’s a quick update on the latest developments around family trust taxes.
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Global context: Several jurisdictions are considering raising trustee taxes on family or discretionary trusts, with a common aim to align trust rates with top personal tax rates and to curb income sheltering. This trend has been prominent in New Zealand and Australia, among others, and has led to ongoing policy discussions and updated guidance for trustees.[2][3][8]
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New Zealand specifics: Since 1 April 2024, trustee income that isn’t distributed to beneficiaries can be taxed at 39%, up from 33%. A de minimis threshold of $10,000 per year generally keeps trust income at the lower rate, while distributions to beneficiaries are taxed at their own rates. The 39% rate remains in effect through 2026 with IRD oversight on distributions and retention of income.[3][2]
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Australia-related signals: Several sources track proposals for a minimum trust tax or higher tax treatment on distributions, including discussions around a proposed 30% minimum tax on discretionary trust distributions in some contexts. The landscape includes budget debates and expert analyses about the potential effects on family businesses and estate planning, with mixed opinions about the net benefits and possible tax planning responses.[8][9][10]
What this means for you if you’re in Prague or generally outside these jurisdictions:
- Local Czech tax rules for family trusts are separate from NZ/Australia discussions. If you hold or plan to establish a family trust in the Czech Republic or another country, your tax treatment will be governed by that jurisdiction’s rules, not by NZ/Australia changes. For the Czech Republic, consider consulting a local tax advisor about whether any trust income is taxed at corporate or personal rates and how distributions to beneficiaries are treated under Czech law.
If you’d like, I can tailor a concise briefing for your location (Prague/Czech Republic) and your specific trust structure, including a quick checklist of questions to bring to a local tax advisor. I can also pull the most recent country-specific guidance and summarize it for you. Please tell me which jurisdiction you want the focus on.