Sep 3, 2026 – 5.58pmLabor has backed away from a steep tax penalty on so-called bucket companies used by discretionary trusts, making changes to its May budget proposal that also preserve a popular form of income splitting.Draft legislation released on Thursday allows existing trusts to avoid the planned new 30 per cent minimum tax on distributions via a one-time election that locks in distributions to individuals or bucket companies (also known as corporate beneficiaries) at a fixed rate.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
Chalmers’ trust changes preserve the bucket company
Trusts can avoid the 30 per cent minimum tax and continue to split income to bucket companies and low-tax-rate individuals. But there’s less flexibility.
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