New 30 per cent trust tax creates significant challenges for private groups
Client AlertThe announced 30 per cent minimum tax on discretionary trusts creates significant challenges for private groups.
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By: Brett Curtis
15 Apr 2024 3 min read

In the last five months alone, the ATO has seen landmark wins in PepsiCo and SingTel, and revived and released key pieces of guidance on topics such as IP migration and payments under software arrangements which could be characterised a ‘royalty’. Not to mention the new thin capitalisation legislation that just passed parliament and the exposure draft legislation on public Country-by-Country Reporting.
The ATO’s Tax Avoidance Taskforce was established in 2016 to provide the Government and the community with confidence that multinational enterprises, Australia’s public and private businesses (and associated individuals), pay the right amount of tax in Australia.
The Australian Government funded the Tax Avoidance Taskforce with $679m over four years from 2016. In the 2019–20 Federal Budget, a further $1b extended the operation of the Tax Avoidance Taskforce to 2022–2023. The 2022 October Budget subsequently included an announcement the Government would further extend the Tax Avoidance Taskforce to 30 June 2026 and provide an additional $200m in funding each year.
When the Taskforce was first established in 2016, it was expected to recover $3.7b in tax liabilities over four years. With the increased funding, it was announced in November 2022 that the ATO’s focus on large public groups, multinationals and privately owned and wealthy groups had raised tax liabilities of $29b since 2016. Further, the activities of the Tax Avoidance Taskforce helped generate $17.2b of this amount (or almost 60 per cent).
Given the undisputable success of the ATO in targeting multinationals, the question around additional funding allocated for the ATO in the upcoming Federal Budget would not be a surprising outcome.
The more interesting question is what this additional funding will be put toward. For example, there are many possible focus areas for the ATO to utilise additional funding including:
Only time will tell whether additional funding is provided to the ATO and what this will be directed toward. Notwithstanding this, transparency, accountability, and integrity around the tax outcomes of multinationals are likely to continue to be heavily pursued by the Government through ATO initiatives.
The announced 30 per cent minimum tax on discretionary trusts creates significant challenges for private groups.
The Government has announced revisions to several tax measures in the Budget, affecting capital gains tax treatment for small businesses, a special carve-out for start-ups, and a conditional exclusion for discretionary testamentary trusts from the 30 per cent tax on trusts.
Explore how the Federal Budget 2026–27 reshapes M&A in Australia, with CGT changes, trust tax reforms and implications for deal structuring and transaction timing.