Senate Inquiry Questions Trust Tax Reforms' Impact on Staff Payments

A Senate inquiry began a hearing on the government’s plan to introduce a new minimum 30% tax on discretionary trusts. During the hearing, Senator Nick McKim questioned witnesses about how these reforms would change the way small businesses using discretionary trusts pay their staff. Witnesses noted that payments to staff who are not beneficiaries of the trust would likely remain unchanged.

The proposed tax overhaul targets discretionary trusts, a financial structure often used by small businesses. The inquiry highlighted that if family members are compensated through distributions rather than traditional wages, the new tax rules could alter how those businesses remunerate their staff.

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