Budget tax reforms are shifting – here’s what’s changed

About
  • About us

    BG Private is an AFR Top 100 accounting, audit, and advisory firm.

  • Our history

    We have a proud 45-year history. Learn more about our journey here.

  • Our purpose statement

    Discover our client service ethos, and the philosophy that drives us.

  • Need a guest speaker?

    Our experts can present on a range of topics. Find out more here.

Services
Services for businesses
  • Accounting & Business Advisory

    Discover how our accounting and advisory services can help your business grow and reach its goals.

  • Audit & Assurance

    Find out how we can assist you with your audit, assurance, and statutory reporting requirements.

  • Tax Advisory

    Learn how we can answer your complex tax questions with our specialist insights and advice.

  • Corporate Advisory

    Find out how our strategic and operational involvement can help your business maximise its value.

  • Private Equity

    Learn how we generate healthy returns for investors by backing ambitious SME founders.

  • Property Advisory

    Discover how we can help maximise your property portfolio with insights, strategy, and transaction support.

  • Bookkeeping

    See how our bookkeeping services can help your business run smoothly so you can focus on growth and profitability.

  • Management Accounting

    Discover how our Management Accounting service empowers business owners to make smarter, data driven decisions.

  • CFO Advisory

    Discover how our CFO Advisory service can guide your decision-making and create lasting value for your company.

Services for individuals
  • Accounting Services

    Discover all the ways we can help you navigate and optimise your tax matters.

  • Tax Advisory

    Learn how we can answer your complex tax questions with our specialist insights and advice.

  • SMSF Management

    Discover how we can help with the administration of your Self-Managed Super Fund.

  • Financial Planning

    Find out how we can help you reach your financial goals.

Specialisations
Industries
  • Music & entertainment

    Find out how we take care of the numbers so you can get back to playing the numbers.

  • Professional services

    Explore how we can take care of the books so that you can spend more time on your clients.

  • Manufacturing, wholesale & retail

    We can make your life easier while you make things for us all.

  • Property, construction & trades

    We can help you build your financial future while you help build Australia.

  • Tech, media & creatives

    Learn how we can take care of the “boring but important” so you can focus on making magic.

  • Hospitality

    Read up on all the services we have for you, so you can get back to serving your guests.

  • Education

    Audit, assurance and advisory support that helps education providers and independent schools meet their obligations with confidence.

Business types
  • SMEs

    Learn how we partner you along your journey to help you create a thriving business.

  • Not-for-profits

    Learn how we can help with your accounting and audit needs so you can focus on helping others.

  • Family businesses

    Discover how we can help you every step of the way as you build a legacy-leaving family business.

  • Australian businesses overseas

    We can help you navigate the exciting process of expanding overseas.

  • Foreign companies in Australia

    We can help you set up and run your operations Down Under.

Our People
Insights
  • Articles

    Read the latest BG updates and interesting articles from our expert advisors.

  • Case studies

    See examples of how we have helped clients to learn how we can help you as well.

  • Video & podcasts

    Get the latest insights from our experts on a range of topical money matters.

  • Events

    Discover our upcoming events including webinars, in-person events, and fundraisers.

  • Newsletters

    Catch up on our recent client newsletters which cover important news and updates.

Careers
  • Why choose us

    Find out how we can help grow your career, and learn about our rewards and benefits.

  • Current opportunities

    We are always looking for talented people! Browse our vacancies and apply today!

  • Recruitment process

    We like to make the recruitment process as seamless as possible. Learn more here.

  • Experienced professionals

    Find out why BG Private is a great place for seasoned professionals.

  • Graduates

    Apply what you’ve been learning to real-world cases – launch your career with us!

Pay Invoice
Contact

Your business structure is about to change - here's why

If you own a business or hold investment assets through a trust structure – which is common – you need to understand what’s happening from 1 July 2027. The removal of the 50% capital gains tax discount (from 1 July 2027) and a new 30% tax rate on discretionary trusts (from 1 July 2028) are fundamentally changing the maths on how to structure a business efficiently. 

For most owners, this won’t mean panic. But it does mean the structure that worked brilliantly five years ago may not be the best choice going forward – and for some, it might be worth revisiting.

Not sure if your structure is still the right fit?

Talk to your BG Private advisor about whether your business or investment strategy needs adjusting. 

Why the trust structure is losing its shine

Traditionally, trusts have been a go-to choice for holding company shares and investment assets. They offered flexibility, asset protection, and until now, tax advantages that made sense. But the new rules change the equation.

The removal of the 50% CGT discount from 1 July 2027 removes one of the main incentives for holding investment assets in a trust structure. In comparison to a trust, a company is taxed at a flatter, more predictable 25% or 30% rate. In the past, trusts have commonly managed the overall tax rate on distributions of income by distributing some of their income to a company (i.e. a corporate beneficiary) who would be taxed on the income distribution received at either 25% or 30%. Here’s the issue: from 1 July 2028 that income will now be taxed at 30% in the trust, and a further 25% or 30% at the company rate. That double hit makes the arrangement economically unviable for many business owners.

What this means

The trust-and-company structure that has been a standard playbook for years is being rewritten.

What’s changing in relation to setting up new structures

If you’re setting up a new structure – whether for a business operation or to hold investment assets – the landscape has shifted.

For operating a business

Companies remain a solid choice for running businesses, but the ownership structure may change. Instead of a trust owning shares in a company (the traditional model), you may see more structures where a holding company owns the shares in the operating company. You might also see companies issuing different classes of shares more often – giving more flexibility to distribute profits to shareholders based on their individual tax rates, rather than everything flowing through a trust.

For holding investment assets

With the removal of the 50% CGT discount, companies are becoming more attractive for holding investment assets. At 30%, the tax rate is predictable and competitive. And if you’re funding the purchase of the investment assets from profits generated from an existing trading company, a loan between two companies doesn’t trigger Division 7A compliance obligations — whereas a loan from a trading company to a trust would need to be repaid with principal and interest over 7 years.

What this means for you

If you’re planning a new business venture or thinking about acquiring investment assets, the structure you choose now should be built with these rule changes in mind from day one.

What about your existing structure?

If you already have a trust holding company shares in a trading company or investment assets, you don’t need to rush into changes. Restructuring can come with costs – capital gains tax and potentially stamp duty – so moving things around just because the law is changing may not make sense.

It is, however, worth reviewing your existing structure in light of the new rules. Some structures will benefit from adjustment over time; others will remain perfectly efficient. The key is understanding your position and making deliberate choices, not reactive ones. Tax rollover provisions exist to defer CGT implications when restructuring, so if change does make sense for your situation, it may be able to be acheived in a way that avoids capital gains tax implications arising.

Time to plan, not panic

This isn’t a “change everything now” moment – it’s a “review your position and plan ahead” moment.

What this means for you

Your existing structure was built for the old tax environment. Most structures will remain workable, but the new rules may affect decisions about where to park future profits, how to distribute income, or which vehicle you use for new asset investments. A structure review with your BG Private advisor will clarify whether any adjustments make sense for your circumstances.

The fact that the rules are changing doesn’t mean your structure is broken – it means it’s time to make sure you’re making conscious, informed decisions about it going forward.

Ready to review your structure?

Contact your BG Private advisor to discuss how these changes might affect you.

About the author

Tim Olynyk

Tim Olynyk

Partner | Tax Advisory
Tim Olynyk is a Tax Advisory Partner with close to 30 years of specialist experience advising private family groups and professional services firms on complex tax matters. His edge lies in finding smarter structuring solutions, ensuring every transaction is approached with the right tax strategy from the outset.
Read More
Share

Other articles you might like
Financial advice
Comfortable retirement, modest retirement or age pension only – what’s the difference?

Average super balances grow significantly with age, but a substantial gap remains between what Australians have saved and what they'll...
Audit
The ATO is auditing more clients than ever – are you protected? 

Understanding how Audit Shield Protection can protect you or your business.
SMSF
Division 296 – Important review of SMSF investment portfolios before 1 July 2026

Important news for how Division 296 may impact your SMSF investment portfolio before 1 July 2026

See More