Treasurer proposes stamp duty relief for small firms facing new trust tax

Treasurer Jim Chalmers has introduced draft legislation that would allow small enterprises to avoid state stamp duties when restructuring to escape the proposed 30% minimum tax on discretionary trusts. Instead of converting to a fixed trust or a company—actions that would trigger stamp duties—the bill lets trustees opt for fixed distributions within their existing trusts, keeping them exempt from the tax as long as the distribution pattern stays unchanged.

The proposal also exempts donations from discretionary trusts to charities, deductible gift recipients, and other tax-exempt entities. The draft is open for public feedback for two weeks, closing on September 18. Small-business lobby COSBOA warned that without relief, owners face a choice between higher taxes or expensive restructures, while ACCI’s Andrew McKellar highlighted the heavy legal and advisory costs involved.