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By: John McInerney
12 Oct 2026 5 min read
At a recent Grant Thornton Affinity and Results Legal presentation, we explored how tax reform, generational change and dispute risk intersect for private businesses. The central message was clear: structural change should not be approached solely as a tax exercise. It is a chance to examine whether the broader arrangements supporting the enterprise remain commercially sound, well governed and capable of transitioning to the next generation.
The scale of the challenge is significant. An estimated $5.4 trillion is expected to transfer between generations over the next 20 years. At the same time, family business disputes are becoming more frequent and can be especially costly when ownership, control, valuation and expectations have not been clearly documented.
The proposed 30 per cent minimum tax on discretionary trust distributions has prompted warnings from the accounting profession about the cost and complexity of restructuring. CA ANZ has indicated that restructuring an individual family trust could easily cost $100,000, while CPA Australia has estimated a broader compliance burden of $2 billion to $2.8 billion across approximately 850,000 discretionary trusts for basic professional advice.
Those figures reinforce the need for careful, coordinated planning. However, the direct restructuring cost is only one consideration. A rushed or narrowly focused response may also create unintended duty, financing, asset protection, governance, stakeholder or succession consequences. Decisions should therefore be tested across tax, legal, accounting and commercial perspectives before implementation.
Rather than starting with a preferred transaction, advisors should first clarify the family's objectives, identify constraints and test the resilience of the existing arrangements. Useful questions include:
Effective intergenerational planning goes beyond wills and the transfer of legal ownership. It should align the family's objectives with the group's ownership structure, governance framework, funding arrangements and commercial strategy. Where assets will be held or managed jointly, appropriate agreements should address decision-making, valuation, liquidity, exit rights and dispute resolution.
This becomes more important as ownership moves from a founder to siblings and then to a wider group of family members. Informal understandings that worked under the founder's leadership may not provide sufficient clarity for the next generation. Promises, undocumented loans and differing views on value or control can quickly become sources of conflict and value erosion.
A structured review may identify entities or arrangements that no longer support the group's future commercial, ownership or succession objectives. Corporate simplification can improve transparency and reduce complexity, but the objective should not automatically be the smallest possible structure. Each entity should have a clear ongoing purpose, and the overall structure should be capable of being understood, governed, funded and transferred effectively.
Where legacy liabilities, shareholder disputes or financial distress prevent conventional change, specialist restructuring options may be required. Early engagement is critical because it allows more time to stabilise the position, preserve viable operations, negotiate with stakeholders and protect enterprise value. Formal restructuring should not be used as a tax-planning mechanism, but it may provide a pathway where financial constraints would otherwise prevent a commercially viable transition.
Good planning should consider not only the intended succession pathway, but also what happens if events do not unfold as expected. A practical contingency plan should identify key risks, decision-makers, funding requirements, stakeholder dependencies and escalation triggers. It should also be regularly reviewed as tax settings, ownership, family circumstances and business performance change.
Tax reform and generational change provide a rare opportunity for advisors and their clients to step back and assess the whole picture. A coordinated risk review can identify preventable issues early, align ownership and governance with the family's objectives and ensure that contingency plans are in place before wealth or control is placed at risk.
Grant Thornton can work with business owners, families and their existing legal and tax advisors to undertake targeted risk reviews, assess financial and structural constraints, develop practical step plans and identify appropriate restructuring or contingency options. The objective is to preserve enterprise value and give stakeholders the best available options before pressure removes them.
The announced 30 per cent minimum tax on discretionary trusts creates significant challenges for private groups.
It is important for business owners facing financial distress to understand all the options available to them. Small Business Restructuring (SBR) offers a pathway for small and medium sized Australian companies experiencing financial pressure to deal with unmanageable debt, reset operations, and continue trading through and beyond difficult times. SBRs are also a cost-effective solution to save a business compared to a liquidation shut down.
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