18/06/2026
🚨 BREAKING: A very welcome outcome for Australian families.
The Federal Government has confirmed that income from genuine testamentary trusts will be exempt from the proposed 30% minimum tax announced in the 2026 Federal Budget.
This is encouraging news and recognition of the important role testamentary trusts play in protecting Australian families.
But testamentary trusts have never been just about tax. Done well, they can help protect inheritances from:
✔️ Relationship breakdowns
✔️ Premature access to wealth
✔️ Bankruptcy and creditor claims
✔️ Addiction, disability and other vulnerabilities
✔️ Assets passing outside the bloodline unintentionally
Importantly, the Government has also reaffirmed that Australia has no inheritance tax or death duties.
However, some aspects of the announcement still warrant careful consideration.
From 1 July 2028, the proposed exclusion is limited to discretionary testamentary trusts that can only benefit individuals and income tax exempt entities.
The detail matters.
We remain hopeful that the Government will engage in genuine consultation with the profession and the community before these measures are finalised.
At The Estate Planning Centre, we will continue to advocate for a complete exclusion for genuine testamentary trusts. If Australia truly has no inheritance tax or death duties, that principle should be preserved in substance, not merely in name. Measures that impose additional tax simply because wealth passes on death risk becoming a death tax by another name.
Estate planning is about more than tax. It is about protecting loved ones, preserving options and stewarding wealth wisely across generations.
