Chartered Accountants Australia and New Zealand (CA ANZ) has made a submission to the Senate Economics Legislation Committee inquiry into the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 and the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 (the Bills).

Our submission raises concerns about the consultation process, the implementation of the reforms and their impact on taxpayers and the profession. The limited time to review complex trust legislation and its interaction with other provisions, including capital gains tax (CGT) increases the risk of drafting and interpretation issues that could require future correction.

CA ANZ is also concerned that legislative determinations will settle important parts of the proposed rules. Where possible, substantive design features should be included in primary legislation.

The reforms also add to significant compliance demands while some rules remain incomplete. Taxpayers and advisers are already subject to heavy workloads implementing other regulatory changes, including anti-money laundering reforms and Payday Super, which are on top of their existing client obligations.

CA ANZ is calling for a statutory review of the trust and CGT provisions, given the speed and piecemeal implementation of the reforms.

Key proposed changes

The Bills propose a minimum 30% tax on certain discretionary trusts. They also provide income tax roll-over relief from restructuring and introduce an excluded election trust (EET) regime.

CA ANZ has raised concerns that:

• the rules result in double taxation of corporate beneficiaries and beneficiaries of interposed fixed trusts, going beyond the purpose of the legislation to curb income splitting
• restructuring to access roll-over relief or the EET could involve significant stamp duty, legal, refinancing and valuation costs
• the EET election involves interactions with the family trust election provisions which themselves require reform.

The Bills also amend CGT and negative gearing rules enacted through earlier legislation in Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. CA ANZ welcomes these amendments, which address many issues raised in its submissions on the exposure draft legislation.

CA ANZ also welcomes technical amendments to ensure individuals do not exceed their concessional contributions cap in 2026/27 from their superannuation guarantee contributions as a result of the transition from the quarterly superannuation guarantee system to the new Payday Super system.

CA ANZ’s key recommendations

Our submission makes the following key recommendations:

• provide GST roll-over relief and an immediate deduction for eligible restructuring costs 
• use consistent definitions of ‘no material discretionary elements’ and align related fixed trust provisions across tax law using the new fixed trust definition
• allow the Commissioner more flexibility for extensions to the three-year roll-over period 
• release continuity requirements for non-family trusts for consultation as soon as possible 
• clarify how roll-over relief will interact with the CGT reforms 
• give the EET regime greater flexibility to respond to changes in family and commercial circumstances, and clarify the consequences of voluntary revocation 
• ensure eligible beneficiaries of interposed non-minimum tax trusts can access the tax offset 
• regarding the exclusion from minimum tax income, refine the anti-avoidance test for testamentary trusts and reconsider restrictions affecting certain not-for-profits 
• urgently release draft legislation for the next tranche of  reforms.