Labor's plans to tax trusts
- Introduce minimum 30 per cent tax rate for discretionary trust distributions to people age over 18.
- This tackles the practice of splitting incomes among family members to minimise tax paid. The practice is legal but Labor argues it's unfair.
- Builds on reforms of 1980s by then-treasurer John Howard to impose top tax rate on discretionary trust distributions to minors (people under 18).
- More than 820,000 trusts in Australia.
- About 315,000 will be affected by changes (about 38 per cent).
- Will not affect 98 per cent of taxpayers.
- Special disability trusts, deceased estates, fixed trusts, farm trusts and charitable trusts will be exempt.
- Average amount in private trusts by the wealthiest 20 per cent of households is $123,000 - second wealthiest 20 per cent have on average $4000.
- Extra $55 million to tax office to boost crack down measures on tax-avoidance using trusts.
- Policy expected to raise $4.1 billion over four years and $17.2 billion over a decade.
Related reading
Labor pledges to crack down on 'unfair' family trusts
