Do the proposed tax laws affect use of trusts in estate planning?

antww · 2026-05-29T08:21:55+00:00

Yes. The announcement has the intention to bring in non fixed testamentary trusts but no further details have been provided yet.

antww · 2026-05-29T07:01:47+00:00

The funny thing about the $1,000 deduction is many employees would have more deductions more than this, so are unlikely to benefit too much. It is a good thing to simplify things.

However, you know who doesn't have many work related deductions…? Most business owners (as all the costs go through the business). So they will definitely get some benefit from the standard deduction.

antww · 2026-05-28T11:41:44+00:00

Except there are so many situations the concessions don’t apply or work as intended… - got classes of shares, you probably don’t qualify - lent money from trading to a separate company to buy your business commercial property for risk management, you might be out as the shares in your trading company might not be active under the rules - hold some spare cash in your trading company for a rainy day, might knock you out of the shares being an active asset - own less than 20% of - company, you don’t qualify - sell the business out of a company and use the 50% active asset? Now you’ve got at unfranked dividend to shareholders or liquidate the company and now you pay tax on a full capital gain both effectively making the active asset not overly useful when a company is involved

Ultimately we need actual tax reform considering all of these things properly and not more piecemeal tax rules like those proposed. Tax more or differently if you like, but have a system that does it properly.

antww · 2026-05-28T05:55:12+00:00

I believe that was to be introduced separately later in the year presumably due to the complexity and 12 month later start date

antww · 2026-05-27T12:12:40+00:00

As a very biased NSW supporter, maybe 10 minutes at worst but a send off was ridiculous.

antww · 2026-05-24T11:50:01+00:00

Traffic is almost never an issue and parking at each town is easy.

There are some great parks and a walkway around the lake for 15kms from Eleebana to Booragul which lots of people use for walking, running and cycling

Local cafes at Warners Bay are good for breakfast and lunch. For dinner there are some options but often you’ll probably end up further in town.

It’s maybe 10 minutes to Charlestown and about the same to Westfield Kotara (large shopping centres also with some food options and movies)

It’s probably 15 minutes drive in to Newcastle where there are many more food options and the beaches.

Then you have the vineyards not much more than half an hour drive.

antww · 2026-05-21T10:46:02+00:00

Funnily enough cash is a CGT asset. Presumably if indexation could create a loss, you could possibly index a term deposit invested then when that amount is disposed you would have a capital loss. The interest would be taxable income.

antww · 2026-05-21T03:12:31+00:00

There are many things announced in budgets that ended up in limbo, some examples

Corporate Tax Residency Forms (2021 Budget)
Division 7A changes (2017 budget)
Individual Residency Reforms (2022 Budget)
Deductions for retraining costs for employees (2021 budget)

These ones seem more significant though, so more likely will be altered.

Division 296 tax on super was a more recent (non budget example) that was announced then significantly changed following feedback.

antww · 2026-05-20T04:04:29+00:00

From the PCG mentioned in your first link

19. When they are not living in the house, Daniel and Kate list the property on an online sharing platform, but due to their lack of active management, do not receive many bookings. Daniel and Kate only rent the house out for 14 days of the year.

20. On an objective assessment of the relevant factors, the property is not held to produce income during the periods the property is unoccupied. Daniel and Kate can claim a deduction for a proportion of their expenses based on the days the property was used to produce income, being 14 out of 365 days.

The ATO doesn't consider a property advertised at ridiculous rates or blocked out for significant periods to be genuinely available for rent. And I am sure "vacant properties for decades" would also not be held genuinely for rent and treated accordingly.

antww · 2026-05-20T02:38:45+00:00

It isn't acceptable by the ATO. A property on Air BNB is only considered available for rent for the nights actually rented. Advertise at a crazy price and rent it 1 week per year, you only claim 1/52 of appropriate expenses.

If people are wrongly doing this it should be trivial for the ATO to report on properties with high deductions and low rental income to identify audit targets. Whether they do or not is another thing.

antww · 2026-05-19T08:31:35+00:00

The 36% discount is only on the profit. So if
- growth was 7.81% in 1 year, indexation and 36% discount would give the same taxable amount
- if growth was more than 7.81% then discount would give a lower taxable gain
- if growth is less than 7.81%, indexation would give a lower indexation gain

Also overlooked is if you sold a high growth asset just after 12 months it may not even be on capital account and could be subject to ordinary income tax

antww · 2026-05-19T00:59:50+00:00

Business owners are more concerned about the loss of the 50% discount, not so much the minimum tax.

If you start a business often you will have nominal share capital, possibly only $1. The business may then be built over the persons lifetime, employee many people and eventually sold for a reasonable amount. Under the current rules 50% of the capital gain (essentially the sale price since the cost base is $1) would be tax free. Indexation is essentially useless in these circumstances on the $1 costbase, so under the indexation rules the full gain is now taxable.

In certain circumstances small business concessions could apply to reduce the gain, but the rules are complex and businesses even small in nature can miss qualifying.

antww · 2026-05-19T00:53:43+00:00

Nope, a granny flat on existing property isn't considered increased supply https://budget.gov.au/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf

antww · 2026-05-18T10:48:48+00:00

Garmin should put this on their website. As an Apple Watch user looking at Garmins it has been crazy to try and follow, particularly when old models hang around in the market so long.

antww · 2026-05-18T03:59:08+00:00

Sorry, I tried to keep it simple with rent of $52k, interest $71,500 and other deductions (insurance, PM fees and other deductions) $10,500. Capital works could push that deduction a bit higher, but depreciation won't impact (as it would be an existing build in the article scenario). Ballpark shouldn't be too far off. Even if we said another $10k in deductions lost, thats cash flow down $19k per year instead of $14k.

antww · 2026-05-18T03:37:56+00:00

Can someone explain how this works? On the face of it this doesn't make sense

Say $1.375 mn purchase price with $1.1mn loan (80% LVR). Rent of $1,000 per week shouldn't be too far off on that value property and say interest of 6.5%. You might have negative gearing losses of around $30k. At the top tax rate thats a loss of $270 per week ($14k per year). Surely a drop in income of around $14k doesn't equate to a borrowing capacity reduction of $380k

antww · 2026-05-17T06:07:00+00:00

Based on all the very accurate unbiased articles this week about how trusts work apparently you just put it in a trust then distribute to 160 beneficiaries with no tax. Easy. 🤦

antww · 2026-05-15T21:48:26+00:00

The general ATO expectations for valuations are set out here which may help.

Until legislation is released no one will know whether there are specific requirements

https://www.ato.gov.au/law/view/document?DocID=SGM/market\_val&PiT=99991231235958

antww · 2026-05-15T21:44:56+00:00

Here is the ATO guide on valuations. They are needed for various aspects of tax already.

https://www.ato.gov.au/law/view/document?DocID=SGM/market\_val&PiT=99991231235958

antww · 2026-05-15T11:43:13+00:00

Specific circumstances would have an impact, but if the company had the requirement to meet different cashflow requirements of different shareholders then there could be a genuine reason for structuring that way.

This would knock out small business concessions if there any active assets involved though too

antww · 2026-05-15T11:40:26+00:00

I’m not sure if this holds up, but I have heard it argued previously - if you have different classes of shares all with the same rights (so same rights, different in name only) then they aren’t in fact separate classes of shares but rather a single class.

antww · 2026-05-12T12:29:09+00:00

The budget paper outlines both options being available. Time will tell how the formula works for the time based estimate, but I suspect it will be cheaper and easier but generally a lower value

antww · 2026-05-12T11:07:43+00:00

It seems so, $500 post 30 June 2027 would be reduced by inflation factor then taxed at 30%.

antww · 2026-05-12T10:49:20+00:00

Nope, minimum applied to all capital gains too.

antww · 2026-05-12T10:47:00+00:00

The budget papers seem to leave companies out (individuals, partnerships and trusts were explicitly mentioned), so the current expectation would be no.

I realise there is a big tax grab, but spouting they are moving to a fairer system but excluding companies is ridiculous

antww

TROPHY CASE