Australian trust tax reforms raise state duty concerns for farmers

Proposed trust tax reforms by the Albanese government have raised concerns regarding state transfer duties, particularly for farming families with significant landholdings. While the federal government intends to introduce a minimum 30 per cent flat rate on the taxable income of discretionary trusts starting in July 2028 to prevent income-splitting, the interaction with state-level duty laws remains unclear.

CPA Australia has contacted state and territory treasurers seeking certainty, noting that no jurisdiction has yet confirmed whether these reforms will trigger additional duty liabilities. The organization estimates that professional advice costs for the approximately 850,000 discretionary trusts facing restructuring decisions could reach between $2 billion and $2.8 billion.

Legal experts suggest that for agricultural businesses, transfer duty on land or other dutiable assets could become the single largest cost associated with restructuring their business models to comply with the new federal tax rules.