u/skankypotatos

question from an Australian family to a financial expert has sparked debate about the federal government's generational trust tax reform.
The couple, aged in their 50s, wrote to the Sydney Morning Herald's money expert Noel Whittaker and explained that their small business annual income, operated through a family trust, is split into three $60,000 streams, totalling $180,000.
That money is then funnelled to the husband, wife and teenage daughter.

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Once Labor's tax laws come into effect in 2028, tax on discretionary trust incomes will be increased to a flat rate of 30 per cent. (Getty)
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**"**How are we likely to be affected by the proposal to levy a flat tax of 30 per cent on family trusts?" they asked.
The question posed to Whittaker was simple, but his answer may come as unwelcome news.
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"You are likely to be hit hard," he explained, adding that the couple likely currently pay just $27,000 in total tax on the distributed incomes.
Once Labor's tax laws come into effect in 2028, this tax will increase by 100 per cent.
"Under the proposed arrangements, the trust would cop a flat tax of 30 per cent, which would be $54,000, so your tax would effectively double," Whittaker added.
"There is no need for urgent action, as these changes are still two years away, but you will certainly need to discuss with your accountant the optimal structure."
There could be a small loophole that would allow the couple and their daughter to pay slightly less tax, but it involves slashing the incomes paid to $45,000 per year.
Whittaker said the remaining balance could be paid again as a trust distribution or a superannuation, where it would be taxed by just 15 per cent.

How many wage earners on 180k pay just 27k tax???