Minimum tax on discretionary trusts—exposure draft legislation
Submission Date: 22 September 2026
The Law Council of Australia provided a submission to respond to the Treasury’s exposure draft legislation concerning the proposed minimum tax on discretionary trusts.
This submission focuses on input received from the Law Council’s constituent bodies, namely the Law Institute of Victoria, the Law Society of New South Wales and the Queensland Law Society. The Law Council also attaches, for Treasury’s consideration, separate comprehensive submissions that have been prepared by the Taxation Committee of the Law Council’s Business Law Section and Law Council’s National Elder Law and Succession Law Committee.
These separate submissions are reproduced in full (at Attachments 1 and 2) and address the exposure draft legislation in detail from each Committee’s respective areas of expertise. Given the truncated timeframe provided for this consultation, it has not been possible for the Law Council to consolidate, and in some cases, reconcile all feedback into a single submission. Consequently, there may be some overlap and differing perspectives reflected in the submissions.
The Law Council strongly urges that consideration be given to the expert views expressed in the two attachments, as well as the covering letter itself. It is the concluding views of both the Business Law Section’s Taxation Committee and National Elder Law and Succession Law Committee that the legislation is not yet ready for introduction, and more thorough consultation is required.
In this regard, we express our concern that the consultation period was too short having regard to the significance and technical complexity of the proposed reforms. The Law Council’s Best Practice Legislative Checklist emphasises the importance of adequate consultation periods to support informed, meaningful and representative engagement on proposed legislation, particularly where reforms are complex, consequential and likely to affect a broad range of stakeholders.1 A longer consultation period would have better enabled the Law Council to consolidate the extensive specialist input received, and provide Treasury with a single, fully integrated submission.
The Law Council acknowledges that the exposure draft legislation addresses some of the concerns raised in our previous submissions in response to Treasury’s Consultation Paper on this topic in July and August 2026,2 in particular, through a revised fixed trusts definition,3 the introduction of the electable regime,4 and the refundability of excess franking credits.5 However, significant technical concerns and potential unintended consequences remain. These matters reinforce the need for sufficient time to consult on the complete legislative package.
1 Law Council of Australia, Best Practice Legislative Development Checklist (21 July 2025).
2 Law Council of Australia, Minimum tax on discretionary trusts (Submission, 31 July 2026); Law Council of Australia, Supplementary Submission: Minimum tax on discretionary trusts (Submission, 4 August 2026).
3 Minimum Tax Bill, Schedule 1, item 13, substituting proposed section 272-65 of Schedule 2F to the Income Tax Assessment Act 1936 (Cth) (ITAA 1936).
4 Electable Regime Bill, Schedule 1, item 2, inserting proposed Division 6F of Part III of the ITAA 1936.
5 Minimum Tax Bill, Schedule 1, items 15–18, amending Division 67 and Subdivision 207-B of the ITAA 1997.
Last Updated on 23/09/2026
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