TITLE: Australia’s Discretionary Trust Tax Bills: Costs, EET Elections and Testamentary Trust Risks
The $91.54 estimate is a modelling assumption, not a market price
Australia’s proposed discretionary trust tax bills are now before the Senate. Public hearings are scheduled for 5 and 6 November, with the committee report due on 13 November 2026. Treasury’s own paperwork estimates specialist trust advice at $91.54 an hour. Australian accountants say that figure does not reflect commercial rates.
The proposed 30% minimum tax is not law. It may change during the Senate process. But for Australian businesses and trustees, the cost of preparing for it is already under scrutiny.
See why the $91.54 estimate matters
Treasury’s explanatory materials put the one-off implementation cost at $780 million to $1.1 billion, with a midpoint of $939 million. The model assumes that trusts choosing to restructure need about 120 hours of advice. At $91.54 an hour, that is roughly $11,000 per business.
CPA Australia estimates professional advice alone could cost $2.0 billion to $2.8 billion nationally, before restructuring, implementation and state duty costs. The two estimates use broadly similar advice-hour assumptions. The major difference is the hourly rate.
Natalie Lennon, founder of Two Sides Accounting, says $150 an hour would be generous, while advisory work commonly costs $250 to $450 an hour. At $350 an hour, 120 hours would cost about $42,000-not $11,000.
Lennon says the work requires “premium services” and “a high level of skill” because accountants must first understand new legislation. She also points to unbilled work that firms may absorb when small businesses cannot afford additional fees. Jason Andrew, co-founder of Arbor Permanent Owners, summed up the concern: “Did anyone in Canberra think to ask a real accountant?”
Treasury’s explanatory document acknowledges that tax agent fees may be higher, but says authoritative data is limited. For Australian taxpayers, that gap matters: the quoted government estimate is a modelling assumption, not a market price or guaranteed fee.
For background on the proposal, read our earlier update on the proposed 30% minimum tax on discretionary trusts.
Know what CPA Australia wants the Senate to fix
CPA Australia is not opposing trust reform. It says key implementation rules are not yet available, even in draft. The Bills give the Minister 12 powers to make legislative instruments, while the proposed restructuring roll-over window opens on 1 July 2027. Existing trusts would currently have only the 2028–29 income year to make a permanent Excluded Election Trust (EET) election.
CPA Australia’s three recommendations are to:
- Release the outstanding rules before taxpayers have to make irreversible choices.
- Make the EET election workable, including safeguards for honest mistakes and ordinary family changes.
- Update compliance-cost estimates after the rules are final and legislate an independent review within three years.
The EET option would allow an eligible family trust to remain in place by fixing income shares for nominated beneficiaries, subject to the proposed rules. CPA Australia wants a longer election window and practical ways to correct errors.
Jenny Wong, CPA Australia’s Tax Policy Lead, says, “Better is not the same as ready.” She adds: “No Australian would sign a contract before seeing the full terms and conditions. Tax reform should be no different.” Those concerns are especially relevant when an election may be permanent.
Check whether a testamentary trust could be caught
The proposal says testamentary trusts are excluded, but the Bill’s current wording may put many trusts created under existing wills at risk. For testamentary trusts established on or after 1 July 2028, the proposed exclusion requires the trust instrument to restrict beneficiaries so they “can only be” individuals, exempt entities or trustees of a special disability trust.
Many wills allow a testamentary trust to benefit a company or another trust. Under the Bill as drafted, those provisions may prevent the trust from qualifying. Families may face added difficulty if someone has lost testamentary capacity and can no longer update their will.
Hamilton Locke says testamentary trusts clearly operational before 1 July 2028 would not need to restrict their beneficiary class under the current proposal. If you are preparing a new will, consider discussing the proposed restriction with a lawyer. Do not amend a will using a template or AI: the legislation is not final, and the legal details are technical.
Take practical steps while the rules are still proposed
Use the Senate process to stay informed, but avoid rushing into permanent decisions before the detailed instruments are available. You can prepare without assuming the Bills will pass unchanged:
- Follow the hearings on 5 and 6 November and the report due 13 November. This will help you track recommendations and possible changes.
- Map your trust’s exposure. Gather the trust deed and amendments, beneficiary details, accounts, tax returns and distribution records so the relevant facts are ready to review.
- Budget using realistic advice rates. Treasury’s $91.54 figure is a modelling assumption. CPA Australia’s estimates and reported commercial rates point to materially higher costs.
- Check state duty implications. The proposed Commonwealth roll-over would not itself remove state duty. The cost of transferring assets can vary by jurisdiction, so include it in any preliminary cost assessment.
Is the proposed 30% trust tax law yet?
No. The Bills have passed the House and are now subject to a Senate inquiry. Hearings are scheduled for 5 and 6 November, and the report is due on 13 November. The proposal may be amended. If enacted in its current form, the minimum tax would begin on 1 July 2028.
How much could trust tax advice cost?
Treasury’s model assumes $91.54 an hour, or about $11,000 for 120 hours. Accountants report commercial advisory rates of around $250 to $450 an hour. CPA Australia estimates $2.0 billion to $2.8 billion nationally for professional advice. Your costs will depend on your circumstances and work required.
Could the proposal affect a testamentary trust in my will?
It may, depending on the final rules and when the trust is established. The current Bill would require certain trusts established on or after 1 July 2028 to restrict beneficiaries to specified categories. Many existing wills allow companies or trusts as beneficiaries. Get legal advice before making changes.
What is an EET election, and when would I need to decide?
The proposed EET election would let an eligible trust remain in place with fixed income shares for nominated beneficiaries. The current proposal provides a single election year, 2028–29. CPA Australia wants a longer window and error-correction safeguards. Do not make a permanent decision before the rules are settled.
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