The Albanese government’s small business ombudsman has warned that Labor has significantly underestimated the financial burden of restructuring costs associated with its proposed trust tax crackdown.
The advocate urged Treasurer Jim Chalmers to secure stamp duty exemptions to prevent severe economic disruption for small enterprises relying on discretionary trust structures.
This warning follows sharp criticism of the Australian Treasury’s consultation paper on a new 30% tax on distributions from discretionary trusts.
Approximately 350,000 small businesses in Australia operate through discretionary trusts.
Under the proposed reforms, many of these entities face potential double taxation if they are forced to unwind their current structures without relief on stamp duties.
The ombudsman’s intervention highlights a critical gap in the government’s cost-benefit analysis, suggesting that the administrative and fiscal friction of compliance could outweigh the intended revenue gains.
This warning follows sharp criticism of the Australian Treasury’s consultation paper on a new 30% tax on distributions from discretionary trusts.