Trust Restructure Window: How to Advise Clients

If you have clients with discretionary trusts, the trust restructure 2028 advise-clients conversation starts today — 12 May 2026 — with the delivery of the Australian Federal Budget 2026-27. As proposed in Budget Paper No. 2 and subject to passage of enabling legislation, the government has announced a three-year rollover-relief window opening 1 July 2027. Eligible discretionary trusts will be able to restructure into another vehicle with no income tax or CGT consequence — a genuine opportunity for clients who will be materially affected by the 30% minimum tax landing 1 July 2028. Your job between now and then is to triage your client base, model the numbers, and guide each client to a defensible decision.

Disclaimer: This article provides general information only and does not constitute tax advice. All measures discussed are proposals announced in the 2026-27 Federal Budget — subject to passage of enabling legislation and may be amended. Consult a registered tax agent or tax lawyer for advice specific to your client’s circumstances.

Why This Window Matters

The 30% minimum tax on discretionary trust distributions — covered in detail in our post on the discretionary trust 30% minimum tax from 2028 — represents the most significant structural change to trust taxation in a generation. From 1 July 2028, distributions from in-scope discretionary trusts will be subject to a minimum 30% tax rate regardless of the beneficiary’s individual marginal rate. For clients who have structured their affairs to distribute income to lower-bracket beneficiaries, the economics of holding assets in a discretionary trust change materially.

The rollover-relief window, as proposed in Budget Paper No. 2, is the government’s mechanism for giving affected trust holders a clean path out. From 1 July 2027 to 30 June 2030, eligible discretionary trusts can restructure to another vehicle — a company, a sole trader structure, a partnership, or a fixed unit trust — without triggering income tax or CGT on the transition. Assets transfer at cost base. No deemed disposal. That is a significant concession, and it has a hard close date.

The practical implication for your firm: every discretionary trust client needs an initial assessment before the window opens, so you’re not scrambling to execute complex restructures in the final months before 30 June 2030. The clients who get the most value will be the ones whose restructure conversations start now, with modelling done well ahead of the 1 July 2027 open date. The ATO’s trusts guidance provides the underlying compliance framework your analysis will sit inside.

Triage Your Client Base — 4 Buckets

Not every trust client needs action. The first step is sorting your book into four buckets so you allocate your time to the highest-value work.

Bucket 1: Exempt Structures (No Action)

Fixed unit trusts, charitable trusts, and special disability trusts are outside the scope of the 30% minimum as currently proposed. If your client’s trust falls clearly within an exempt category, document the basis for the exemption and file it. You’re done — for now. Monitor draft legislation as it emerges to confirm the exemption boundaries don’t shift.

Bucket 2: Affected but Content (Model and Stay)

Some discretionary trust clients will find that their current pass-through tax position is already close to 30%. If the primary beneficiaries are individuals on high marginal rates, or if the trust is already accumulating at the top rate, the 30% minimum may not change the effective outcome much. These clients may be best served staying in their current structure. The appropriate work here is a documented modelling exercise showing the before-and-after tax position, with a written recommendation filed in the client folder. That documentation protects you both.

Bucket 3: Affected and Likely to Restructure (Priority Work)

These are the clients where the rollover window creates genuine value. High-income beneficiaries currently splitting income at low rates, or trusts accumulating significant wealth that is being taxed at the top individual rate rather than reinvested efficiently — these clients face the largest dollar impact from the 30% minimum and stand to gain most from a well-executed restructure during the window. Prioritise these for modelling and early client conversations.

Bucket 4: Complex or Multi-Entity Arrangements (Highest Fee Work)

Inter-trust loans, multiple beneficiaries across income brackets, trusts that hold both trading business assets and passive investment assets, and structures with recent CGT events — these require the most careful analysis and carry the most complexity in execution. They’re also where your advisory value is highest. Budget more time, engage a tax lawyer earlier, and price the engagement accordingly.

What to Discuss in the First Client Meeting

The first meeting with a bucket 3 or bucket 4 client is a diagnostic conversation, not a decision conversation. Come prepared to ask about:

• Current beneficiary distribution pattern — who receives distributions, at what amounts, and what their individual tax positions look like year to year.
• Asset register inside the trust — trading assets, investment properties, share portfolios, loans to related entities, goodwill. Each asset class has different restructure implications.
• Tax position over the past three years — look at actuals, not just the current year. Beneficiary income changes, one-off distributions, and prior-year losses all affect the modelling baseline.
• Beneficiary income tax brackets — collect current-year and projected future income for all beneficiaries, including any that are entities rather than individuals.
• Future plans — a client planning to sell their business in 2029 has a very different restructure calculus than one planning to hold assets across two generations. Succession planning, retirement timing, and planned capital events all affect the recommendation.

This conversation is billable and sets the stage for the modelling work that follows. Frame it to the client as the first step in a structured project, not a free consultation.

Modelling: Stay vs Restructure

For every bucket 2 and bucket 3 client, build a forward model that runs from FY2027-28 through at least FY2030-31. The model needs to capture:

• Stay scenario: apply the proposed 30% minimum to current and projected distributions. Show the tax position year by year, compared to the current position without the minimum.
• Restructure scenario: apply transition costs (legal fees, accounting fees, stamp duty where applicable, document drafting) against the tax saving from operating in the new structure from FY2028-29 onwards.
• Post-restructure ongoing tax position: model the ongoing tax position in the target structure — company, sole trader, partnership, or fixed unit trust — against the client’s realistic projected income.
• Payback period: the key decision metric. When does the restructure pay back its transition costs in tax savings? If the payback period is two years and the client has a fifteen-year investment horizon, the case for restructuring is strong. If payback is twelve years and the client is planning to exit in five, the case is weaker.

Build the model in a format you can show the client — a simple three-column table (stay / restructure / difference) by year is usually clearer than a complex spreadsheet. The goal is a decision your client can understand and sign off on, not a model only you can read.

Common Restructure Targets

The rollover relief is expected to cover transitions to several common structures. As with all aspects of this measure, confirm specifics once draft legislation is released.

Company Structure

Best suited to trading businesses and clients with a strong asset-protection rationale. The trade-off is narrower than it looks: a 25% company rate for base rate entities versus a 30% trust minimum is a five-percentage-point saving on distributions, but extracting profits as dividends means the shareholder still pays personal tax (with franking credits). The real advantage is retained earnings — profits left in the company grow at 25%. For clients who reinvest heavily, this is meaningful. See our guide on sole trader vs company in Australia for the underlying tax rate comparison.

Sole Trader or Partnership

Best for simple businesses where the primary beneficiary is already the sole operator and asset protection is not a priority. Full pass-through to individual marginal rates means this structure works well only where the operator’s personal income is modest — otherwise the marginal rate exposure exceeds the 30% minimum. Simple to execute, low ongoing compliance cost, easy to price.

Fixed Unit Trust

Best for passive investment holdings — property portfolios, share portfolios, or other income-producing assets where distribution flexibility matters less than structural certainty. Fixed unit trusts are outside the 30% minimum as currently proposed, making them a structurally clean landing point for investment-focused trusts. Less flexibility on distributions than a discretionary trust, but that trade-off may be acceptable for clients whose primary goal is wealth preservation rather than income splitting.

Hybrid: Company Plus Family Trust Holding Shares

For clients who need both asset protection and some residual distribution flexibility, a company held by a family discretionary trust (or vice versa) may be the target structure. This is bucket 4 work — it involves two entities, potentially two trust deeds, and careful attention to the interaction between the trust minimum and the company’s franking account. Engage a tax lawyer early.

Pricing Restructure Engagements

Restructure engagements are project work, not compliance work. Price them accordingly — hourly billing underprices the scope and the liability exposure.

A structured fixed-fee model with documented stages works well:

• Discovery and modelling: 4–8 hours per client. Covers the first meeting, asset register review, and three-year forward model. Indicatively $800–$2,000 depending on complexity.
• Restructure plan and lawyer liaison: 6–15 hours. Covers the written recommendation, client presentation, and coordination with the tax lawyer for document drafting. Indicatively $1,500–$4,500.
• Execution: variable, and largely driven by lawyer time. Your role here is coordinating the transition, reviewing documents for tax accuracy, and lodging any required notifications with the ATO.
• Post-restructure first-year compliance: 4–8 hours. The first tax return in the new structure requires extra care — confirm cost base transfers, ensure no deemed disposal has occurred, and establish the new entity’s records cleanly. Indicatively $1,000–$2,500.

For a medium-complexity restructure, an all-in project fee in the low five figures is reasonable. For a complex multi-entity arrangement, mid five figures is not unusual. Flag these as indicative ranges with clients upfront — scope can expand as the asset register and inter-entity positions become clearer.

For more on running an efficient advisory practice, see how accountants use Taxr to reduce time spent on compliance grunt work and focus on higher-value engagements like this one.

Documenting the Decision (Defensive)

Whether your client stays or restructures, put the analysis and recommendation in writing. A brief email summarising the modelling, the recommendation, and the client’s decision — filed against the client record — is standard professional practice. It also protects against the most common post-event complaint: “Why didn’t you advise me to restructure when I had the chance?”

Document:

• The structure of the current trust and why it is (or is not) in scope for the 30% minimum.
• The modelling output: stay vs restructure, with the payback period.
• The recommendation and the reasoning.
• The client’s instruction — whether to proceed with restructure or remain in the current structure.
• The basis for any exemption claimed.

Store this in your client management system against the relevant year. If draft legislation changes the boundaries of the measure — which is possible — you want a clear record of what was known at the time of the advice.

Working with Tax Lawyers

Trust restructures are not document-free. Deed amendments, beneficiary nominations, CGT-rollover paperwork, and transfer documents require legal drafting. Most accountants will work alongside a tax lawyer on the execution phase rather than drafting documents themselves.

A practical division of responsibility:

• Accountant owns: the modelling, the stay-vs-restructure decision, the transition tax position, and post-restructure first-year compliance.
• Lawyer owns: the trust deed amendments, the restructure documents, the CGT-rollover election paperwork, and any stamp duty advice.

Build a panel of one or two tax lawyers now — before the window opens — so you have a referral pathway ready when client demand peaks in 2027-28. A loose arrangement works: you refer clients for the legal work, the lawyer refers clients who need an accountant back to you. The restructure window will generate significant legal and accounting work; a pre-existing relationship means faster turnaround and better client outcomes.

Communication Cadence

A structured communication plan keeps your client base informed without requiring you to re-explain the measure from scratch each time.

• Initial alert (now): a plain-English budget summary email explaining the 30% minimum and the rollover window — see the template in our accountant budget 2026 client comms template post. Send to all trust clients, not just the ones you expect to be affected.
• 60-day follow-up: schedule discovery meetings with all bucket 3 and bucket 4 clients. The goal is to have modelling complete before the end of 2026 so clients have eighteen months to make a considered decision before the window opens.
• Quarterly status review through 2027-2030: the legislative landscape will shift. Draft legislation will be released, Senate amendments may follow, and the ATO will issue guidance. Keep clients updated each quarter so no one is surprised by a change in the measure’s scope.

Risk: This Measure May Be Amended

An honest note: the 30% trust minimum is a politically contested measure. It has already attracted significant Senate scrutiny, and the specifics — thresholds, exemptions, rollover eligibility — may change between Budget night and the passage of enabling legislation.

Stage your client conversations accordingly. The initial advisory work — triage, modelling, decision documentation — is valuable regardless of how the legislation lands. But do not execute restructures based on Budget-night details. Wait for draft legislation, review it carefully, and confirm the rollover-relief terms before your clients sign any documents or transfer any assets. A restructure executed prematurely — before the legislative conditions are clear — could fail to qualify for rollover relief and trigger an unintended CGT event.

The right message to clients now: “We’re across this, we’re monitoring it, and we’ll have your modelling ready before you need to make any decisions.” That positions your firm as proactive without locking anyone into action before the rules are settled.

Frequently Asked Questions

When does the rollover-relief window open?

1 July 2027, as proposed in Budget Paper No. 2 — subject to passage of enabling legislation. The window closes 30 June 2030. Any restructure executed before 1 July 2027 or after 30 June 2030 will not qualify for the proposed rollover relief and may trigger CGT.

Which clients should I prioritise reviewing?

Discretionary trust clients with: high-income beneficiaries currently paying near top marginal rate; significant accumulated wealth in the trust; complex inter-trust arrangements; or recent CGT events. These clients typically have the largest tax-position swings under the 30% minimum and the most to gain from a timely, well-modelled restructure.

What restructure options qualify for rollover relief?

Specifics will be confirmed in draft legislation. Common target structures include companies, sole trader and partnership structures, and possibly fixed unit trusts. Charitable trusts and special disability trusts are exempt from the 30% minimum entirely, so those clients are unlikely to need restructure advice.

How do I bill restructure work?

Fixed-fee project pricing with documented stages works best: (1) discovery and modelling, (2) restructure plan and lawyer liaison, (3) execution and document drafting, (4) post-restructure first-year compliance. Hourly billing underprices both the scope and the liability exposure. Sample fee bands by complexity — simple, medium, complex — should be shared with clients as indicative ranges at the outset of the engagement.

Should I draft restructure documents myself or refer to a lawyer?

Trust restructures involve drafting deeds, beneficiary nominations, and CGT-rollover paperwork — legal work in every Australian jurisdiction. Most accountants will work alongside a tax lawyer for the documentation phase. The accountant typically owns the modelling, the transition tax position, and the post-restructure compliance. Build your lawyer referral panel now, before demand peaks in 2027-28.

What if my client is happy with their current trust?

If their trust qualifies for an exemption — roughly 40% of discretionary trusts are not expected to be materially impacted — document the basis for the exemption and stay. If they’re in scope, model both scenarios: staying (paying the 30% minimum from FY2028-29) versus restructuring during the rollover window. Put the modelling in writing and let the numbers drive the decision. The client’s job is to make an informed choice; your job is to make sure they have the information to do so.

Trust restructure work is only as clean as the underlying records — every distribution, every asset acquisition, every resolution needs to be documented and accessible. Taxr’s free accountant portal centralises client receipts and exports so the bookkeeping side of a complex restructure conversation doesn’t slow you down. When it’s time to pull the asset register together or reconcile three years of distributions, clean records are the difference between a smooth engagement and a painful one. Set up your free accountant portal.