Client Note

2026 Budget & Structural Tax Changes - What Matters (Year End Overview)

Core direction

The 2026 Budget and related reforms represent an ideological shift rather than tax reform. The combined effect is higher effective tax rates, significantly increased complexity, and greater reliance on compliance enforcement across all traditional family group structures. The broader economy is suffering from low growth, low productivity and inflation due to policy settings smothering various inputs to the economy.

What has changed

• New Division 296 tax introduces additional tax on super balances above $3m
• Proposed 30% minimum tax on discretionary trusts from 2028
• Significant changes to CGT treatment and negative gearing rules
• Increased ATO compliance focus supported by additional funding
• Expanded regulatory burden (e.g. AML/Cybersecurity and practitioner reporting obligations)

What this means (practically)

• Traditional planning structures (trust + bucket company) are materially less effective
• Superannuation above $3m is less concessional, but remains competitive relative to alternatives
• Compliance and documentation standards are rising sharply across all entities

• Technicalities and complexity are being exploited for extra tax revenue.
• Structuring decisions must now be considered in combination — not in isolation
• Simplicity and defensibility are increasingly valuable attributes

Key risks

• Higher effective tax outcomes across multiple structures
• Increased likelihood of ATO audit activity and challenges
• Costly restructuring decisions made prematurely or without full modelling
• Legacy arrangements becoming non-compliant under current interpretations

Immediate considerations

• Avoid major restructuring until key legislation is finalised
• Review complexity across structures and identify areas for simplification
• Ensure documentation, valuations and internal governance are current
• Assess exposure to superannuation thresholds, trust structures and compliance risks
• Focus on long-term positioning rather than short-term tax outcomes

Our view

The consistent theme across all changes is a move away from flexible, planning-driven outcomes toward rigid, compliance-driven outcomes. For most family groups, the optimal response is not aggressive restructuring, but a coordinated review of the overall position with an emphasis on simplicity, control, and long-term resilience.

Chancellors Chartered Accountants | Private Wealth Advisory