Here is a Straightforward Check for Regional Business Owners
Most business structures in Australia are chosen once, usually at start-up, often under
time pressure, and rarely revisited unless something forces the question. That’s
understandable. But a structure that was right on day one doesn’t automatically stay right as
the business changes shape.
This isn’t an article about restructuring for its own sake. For most businesses we work with,
the existing structure is still the right one. The point of this piece is to give you a plain way to
check for yourself, before it becomes an urgent problem.
Why structure matters more than it looks like it does
Your business structure, sole trader, partnership, company, trust, or some combination,
determines three things that quietly compound over time: how much personal liability you’re
carrying, how tax is calculated on what the business earns, and how flexible you are when it
comes to bringing in a partner, selling, or passing the business on.
None of that matters much when a business is small and simple. It starts to matter a great
deal once there’s staff, equipment, property, or real revenue involved.
Signs it’s worth a proper look:
• You started as a sole trader and the business now employs people or holds significant
assets
• Revenue or risk has grown materially in the last two to three years
• You set up a trust or company structure for a reason that no longer applies
• You’re running more than one entity and aren’t sure why one of them still exists
• A major life event is on the horizon: retirement, a new business partner, succession,
or sale.
What this is not:
This isn’t a suggestion that everyone needs to restructure. Restructuring has real costs,
CGT implications, stamp duty in some cases, and the time and complexity of unwinding
what’s there. The right outcome, most of the time, is confirming the current structure still
works and moving on.
Why this year’s check matters more than most structure reviews are worth doing every year regardless. But this year there’s a specific reason to bring trusts into the conversation: the May 2026 Federal Budget proposed a 30% minimum tax on discretionary trusts, due to start from 1 July 2028.
The proposal is not yet law, draft legislation hasn’t been released, and it’s still going
through consultation. But the shape of it is worth knowing while you’re thinking about
structure, because it directly affects a strategy a lot of family businesses rely on:
• A minimum 30% tax would apply at the trustee level on a discretionary trust’s taxable
Income
• Beneficiaries who aren’t companies would get a non-refundable tax credit for tax the
trustee has already paid, but companies (bucket companies) would not, which would blunt a
common income-splitting strategy
• As proposed, there’s no general grandfathering for existing discretionary trusts –
though trusts already set up under a will, and fixed or widely-held trusts, would be
treated differently
• A time-limited rollover concession has been proposed for three years from 1 July 2027,
to let businesses restructure out of a discretionary trust into a company or fixed trust
without triggering CGT along the way. This sits alongside separately proposed changes to the capital gains tax discount and negative gearing from the same Budget – we’ll cover those in more detail later in this content series. The point for now isn’t to react to any of it. It’s that if your structure includes a
trust, these proposals are a genuine reason to have the structure conversation this year
rather than putting it off.
A better time to ask than tax time
The worst time to think properly about structure is during a compressed EOFY conversation
with a deadline attached. A short, unhurried check earlier in the year – like now – gives
you room to actually think, rather than defaulting to (leave it as is), because there’s no time to
consider the alternative.
If you want that ten-minute conversation, get in touch with us here at ASA. There’s no obligation attached – it’s
exactly the kind of check that should happen before it’s urgent, not after.
