Australia's 30% Trust Tax: What It Means for Family Offices Considering Singapore and Hong Kong

Key Takeaways

• Australia’s 2026-27 Federal Budget introduces a 30% minimum tax on discretionary trust income, effective 1 July 2028. The measure is expected to raise $4.5 billion over five years.
• Australia has approximately 840,000 discretionary trusts, around half of which are not expected to be affected in any given year. 90% of private trust wealth is held by the top 10% of households.
• Three-year rollover relief from 1 July 2027 allows restructuring into companies or fixed trusts without capital gains tax consequences.
• Singapore’s Section 13O/13U offers 0% tax on qualifying family office income. Hong Kong’s FIHV regime offers 0% profits tax on qualifying transactions.
• Aerapass is licensed and regulated in Australia, Singapore, and Hong Kong - the only family office platform operating across all three jurisdictions with live AUD, SGD, and HKD settlement corridors.

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Table of Contents

1. What Changed: The 2026 Federal Budget
2. Who Is Affected
3. Domestic Restructuring Options
4. The Offshore Alternative: Singapore and Hong Kong
5. The Singapore Path
6. The Hong Kong Path
7. Operational Requirements for Cross-Border Restructuring
8. Why Tri-Jurisdiction Licensing Matters
9. The 3-Year Window: What to Do Now
10. Frequently Asked Questions

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What Changed: The 2026 Federal Budget

On 12 May 2026, the Australian Government announced a 30% minimum tax on discretionary trusts as part of the 2026-27 Federal Budget. The measure takes effect from 1 July 2028.

Under the new rules, as detailed in the ATO’s guidance on the minimum tax on discretionary trusts, trustees of discretionary trusts will pay 30% tax on the trust’s taxable income, regardless of how that income is distributed among beneficiaries. Individual beneficiaries (other than corporate beneficiaries) will receive non-refundable tax credits for the tax paid by the trustee, which reduces their personal income tax liability. Beneficiaries with marginal tax rates above 30% will pay the difference. Beneficiaries with rates below 30% will lose the excess credit.

Corporate beneficiaries will not receive credits for tax paid by the trustee. According to Pitcher Partners’ analysis, this creates potential effective tax rates of up to 51% at the corporate level and 62.9% when income is ultimately distributed to individual shareholders. This design is intentional - the Budget factsheet states it prevents trust income being cycled through “bucket companies” to avoid the minimum tax.

The following types of trusts and income are excluded from the minimum tax:

Exclusion	Detail	Source
Fixed trusts	Not subject to minimum tax (different distribution mechanism)	Treasury Budget Papers
Widely held trusts	Including managed investment trusts	Treasury Budget Papers
Superannuation funds	Complying superannuation funds excluded	Treasury Budget Papers
Special disability trusts	Full exclusion	Treasury Budget Papers
Deceased estates	Full exclusion	Treasury Budget Papers
Charitable trusts	Full exclusion	Treasury Budget Papers
Testamentary trusts	Income from assets of testamentary trusts existing at announcement (12 May 2026)	Treasury Budget Papers
Primary production income	Excluded from minimum tax calculation	Treasury Budget Papers
Vulnerable minors	Certain income relating to vulnerable minors excluded	Treasury Budget Papers
Non-resident withholding	Amounts already subject to non-resident withholding tax	Treasury Budget Papers

Source: Budget 2026-27, Minimum Tax on Discretionary Trusts factsheet, Australian Treasury (May 2026).

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Who Is Affected

Australia has over one million trusts, of which approximately 840,000 (80%) are discretionary trusts. The number of discretionary trusts has doubled since 2001-02, exceeding the 70% growth rate in companies over the same period.

The scale of income flowing through these structures is significant. In 2022-23, discretionary trusts distributed $142.4 billion in income, with average annual growth of 7.8% since 2011-12. Approximately 90% of total private trust wealth is held by the wealthiest 10% of households - those with net worth above $2.3 million.

Around 810,000 adults received distributions from discretionary trusts in 2022-23, plus 120,000 non-filers who are predominantly minors. However, the Treasury estimates that around half of discretionary trusts will not be affected in any given year, because they already distribute to beneficiaries with tax rates at or above 30%.

For small businesses, approximately 350,000 active small businesses operate through discretionary trust structures. According to SmartCompany’s budget analysis, 40% (140,000) of these are not expected to pay additional tax or need to restructure.

The families most affected are those using discretionary trusts to distribute investment income to lower-taxed family members. Treasury analysis shows that in 2022-23, families with discretionary trusts faced an average tax rate approximately 4 percentage points lower than families with similar incomes who do not use a trust.

For high-net-worth families with substantial investment portfolios - particularly those with $10 million or more in investable assets - the 30% minimum changes the structural mathematics of trust-based wealth management in Australia.

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Domestic Restructuring Options

The Government is providing three-year expanded rollover relief from 1 July 2027 to 30 June 2030, allowing restructuring out of discretionary trusts without income tax consequences, including capital gains tax.

The primary domestic alternatives are:

Convert to a company. Small businesses with aggregated annual turnover below $50 million can access the 25% corporate tax rate. Companies also provide access to dividend imputation, simpler earnings retention, and easier access to debt and equity financing. For pure investment holdings, the standard corporate rate of 30% applies - which matches the new minimum tax, making conversion to a company a neutral move for investment trusts but with simpler administration.

Convert to a fixed trust. A fixed trust provides predetermined beneficiary entitlements, removing the discretionary element that triggers the minimum tax. This preserves the trust structure while providing more certain entitlements. The trade-off is the loss of distribution flexibility.

Employ beneficiaries. Salary and wages paid to beneficiaries working in the business are not subject to the minimum tax. Small businesses can reduce the impact by paying working family members as employees rather than through trust distributions.

Retain the discretionary trust. For trusts already distributing to beneficiaries with marginal rates at or above 30%, the minimum tax creates no additional tax burden. The trustee pays the 30% minimum, and beneficiaries receive non-refundable credits against their personal tax liability.

Each option has trade-offs in control, flexibility, stamp duty exposure, and succession planning. William Buck’s trust analysis and BDO’s assessment of franking credit treatment provide further detail on these restructuring paths. These domestic options are appropriate for most of the 840,000 affected trusts. However, for high-net-worth families with significant investment portfolios and international operations, a different set of options exists.

For families with international investment mandates exploring alternatives to domestic restructuring, learn how Aerapass supports cross-border family office transitions across Australia, Singapore, and Hong Kong.

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The Offshore Alternative: Singapore and Hong Kong

For Australian families with $10 million or more in investable assets and existing or planned international operations, Singapore and Hong Kong offer regulated family office structures with fundamentally different tax treatment.

This is not tax avoidance. Both jurisdictions require genuine substance - local staff, office presence, regulatory compliance, and ongoing reporting. The structures are transparent, regulated, and subject to Australia’s CRS/FATCA reporting obligations. Families considering this path should work with qualified Australian and international tax advisors to ensure full compliance.

Dimension	Australia (from 1 Jul 2028)	Singapore (13O/13U)	Hong Kong (FIHV)	Source
Tax on trust/fund income	30% minimum on discretionary trusts	0% on qualifying designated investments	0% profits tax on qualifying transactions	Treasury, MAS, FSTB
AUM minimum	None (all discretionary trusts affected)	S$20M at application (13O); S$50M (13U)	HK$240M aggregate NAV in specified assets	Treasury, MAS Jan 2025 Circular, IRD
Local staffing	N/A	Minimum 2 investment professionals resident in SG (13O)	At least 2 qualified staff in HK	MAS, IRD
Local spending	N/A	Tiered: S$200K (<S$50M), S$500K (S$50-100M), S$1M (>S$100M) annually	HK$2M annual operating expenditure	MAS Jan 2025 Circular, IRD
Structure	Discretionary trust (existing)	SG-incorporated company (13O); flexible incl. offshore vehicles (13U)	Private company limited by shares (95% family beneficial interest)	Treasury, MAS, Companies Ordinance
Regulatory body	ATO / ASIC	Monetary Authority of Singapore	Securities and Futures Commission	Official regulator websites
Capital gains tax	Yes (on disposal of CGT assets)	No capital gains tax	No capital gains tax	ATO, MAS, IRD

Source: Australian Treasury Budget 2026-27 (May 2026), MAS Circular on Section 13O/13U (January 2025), IRD FIHV Tax Concession (2025), FSTB Family Office Policy Statement (2025). Data current as of May 2026.

The comparison is straightforward: Australia’s new minimum rate is 30% on discretionary trust income. Singapore and Hong Kong both offer 0% on qualifying income within regulated family office structures. The decision is whether the substance requirements, setup costs, and operational complexity of an offshore structure are justified by the family’s portfolio size and international investment thesis.

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The Singapore Path

Singapore’s family office ecosystem has grown rapidly. The Monetary Authority of Singapore (MAS) reported more than 2,000 single family offices by the end of 2024, a 43% year-over-year increase.

Two primary tax incentive structures are available:

Section 13O requires a Singapore-incorporated company with minimum S$20 million AUM at the point of application (effective January 2025, no grace period), two Singapore-resident investment professionals, and tiered local business spending. The scheme has been extended to 31 December 2029.

Section 13U offers greater structural flexibility, including offshore vehicles, for families with S$50 million or more in AUM. This structure suits larger, more complex family operations.

The Variable Capital Company (VCC) framework, introduced in 2020, allows sub-fund creation within a single legal entity. VCC adoption is growing rapidly among family offices seeking asset segregation without separate company incorporations.

For Australian families, Singapore also offers no capital gains tax, a robust trust law framework under the Trustees Act, and a deep fund management ecosystem with more than 1,000 registered fund management companies.

For Australian families, Singapore also provides a well-established regulatory pathway for family office structures, with clear application processes and defined timelines.

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The Hong Kong Path

According to InvestHK’s Family Office data, Hong Kong reached 3,384 single family offices by the end of 2025, a net increase of 681 new SFOs representing 25% year-over-year growth. These offices collectively manage approximately $4.53 trillion in assets.

The Family-Owned Investment Holding Vehicle (FIHV) regime, administered under the Inland Revenue Department’s tax concession framework and regulated by the Securities and Futures Commission, provides a 0% profits tax concession on qualifying transactions. The structure requires a minimum aggregate net asset value of HK$240 million in specified assets (measured at year-end, with a 2-year grace period), at least 2 qualified staff in Hong Kong, and HK$2 million annual operating expenditure.

Hong Kong’s primary advantage for Australian families is China market connectivity:

• Stock Connect provides direct access to Shanghai and Shenzhen-listed securities
• Bond Connect opens China’s interbank bond market
• Wealth Management Connect enables cross-boundary investment for Greater Bay Area operations

For families with mainland China exposure, existing Hong Kong operations, or investment mandates targeting Chinese assets, Hong Kong is a structurally necessary component of the family office architecture, not an optional addition.

Hong Kong’s flat tax structure (16.5% corporate rate, 8.25% on first HK$2 million) with no capital gains tax, no withholding tax on dividends, and no GST/VAT creates a clean operating environment. For qualifying FIHV structures, the effective rate is 0%.

To discuss which jurisdiction - or combination of jurisdictions - suits your family’s investment mandate and succession goals, speak with our family office team.

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Operational Requirements for Cross-Border Restructuring

Moving from an Australian discretionary trust to a Singapore or Hong Kong family office structure involves specific operational steps that require careful coordination.

Custody transfer. Assets held within Australian trust structures must be transferred to the new SG or HK vehicle. This involves custodian-to-custodian transfers across different regulatory jurisdictions, each with distinct settlement and documentation requirements. The rollover relief (1 July 2027 to 30 June 2030) covers the Australian CGT consequences, but the receiving jurisdiction’s requirements must also be satisfied.

Currency settlement. Operating across AUD, SGD, and HKD requires live settlement corridors with competitive FX execution. The AUD-to-SGD and AUD-to-HKD corridors handle the capital movements. Ongoing operations will involve multi-currency portfolio management as the family’s assets span Australian, Singaporean, and Hong Kong-denominated investments.

Cross-border compliance. Each jurisdiction maintains its own AML/CFT framework, CRS/FATCA reporting obligations, and ongoing regulatory requirements. An Australian family operating a Singapore 13O structure faces compliance calendars in both jurisdictions. Adding Hong Kong creates a third compliance stream. The Australian CRS obligations mean that offshore structures are fully visible to the ATO - this is transparent, not opaque, restructuring.

Banking relationships. Establishing banking relationships in Singapore and Hong Kong as an Australian family requires coordinated KYC/AML documentation and, in practice, a timeline of 3-6 months for account opening. Post-AML crackdown banking policies mean enhanced due diligence for new offshore structures, regardless of the family’s domestic banking history.

Consolidated reporting. Family principals need a single view across Australian, Singaporean, and Hong Kong positions. This requires a reporting layer that aggregates data from custodians in different jurisdictions, handles different valuation frequencies, and presents consistent performance attribution across AUD, SGD, HKD, and USD positions.

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Why Tri-Jurisdiction Licensing Matters

The operational complexity described above is manageable with sufficient advisors and manual processes. Managing it efficiently at scale requires technology infrastructure that operates natively across all relevant jurisdictions.

Most family office platforms were designed for single-market operations. Multi-currency and multi-jurisdiction features were added incrementally, creating integration layers between systems that were never designed to work together.

Frank Georgoulas, CEO of Aerapass, frames the Australian opportunity directly: “Australian families facing the trust tax changes need a platform that understands their origin jurisdiction as well as their destination. We are regulated by ASIC in Australia, MAS in Singapore, and the SFC in Hong Kong. That means our compliance frameworks, settlement corridors, and reporting infrastructure are built for the exact restructuring path these families are evaluating. When your platform holds licenses in the same markets where you are moving capital, you remove the intermediary layers that create settlement delays and compliance gaps.”

Aerapass is the only family office platform regulated across Australia, Singapore, and Hong Kong with live settlement corridors for AUD, SGD, and HKD. This tri-jurisdiction licensing means:

• Custody and settlement across all three jurisdictions from a single platform
• Regulatory reporting generated from one data set for ASIC, MAS, and SFC requirements
• Multi-currency portfolio management with native AUD, SGD, HKD, and USD handling
• Coordinated KYC/AML that satisfies the requirements of all three regulators from a single onboarding process
• Consolidated reporting aggregating positions across Australian, Singaporean, and Hong Kong custodians

For Australian families evaluating their options before the 1 July 2028 effective date, the platform question is as important as the structural question. A family office that operates across three jurisdictions needs infrastructure designed for three jurisdictions.

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The 3-Year Window: What to Do Now

The timeline from announcement to implementation creates a structured planning window. Families should work with qualified tax advisors at each stage.

Phase	Period	Action	Source
Assessment	Now - Dec 2026	Model the impact of 30% minimum on current trust distributions. Determine if domestic restructuring or offshore structure is appropriate. Engage Australian and international tax advisors	Treasury Budget Papers
Small business support	From 1 Jan 2027	Australian Small Business and Family Enterprise Ombudsman available for guidance. ASIC support arrangements for businesses wishing to incorporate	Budget 2026-27 factsheet
Rollover relief opens	1 Jul 2027	Expanded rollover relief for restructuring out of discretionary trusts without CGT consequences. Three-year window begins	Treasury Budget Papers
SG/HK entity establishment	Jul 2027 - Jun 2028	For families pursuing offshore structures: entity incorporation, MAS/SFC licensing, banking relationships, custody arrangements. Allow 4-6 months for SG 13O application, 3-6 months for banking	MAS, SFC
Minimum tax effective	1 Jul 2028	30% minimum tax applies to discretionary trust income from this date	Treasury Budget Papers
Rollover relief closes	30 Jun 2030	Final deadline for CGT-free restructuring out of discretionary trust structures	Treasury Budget Papers

Source: Australian Treasury Budget 2026-27 (May 2026), MAS application timelines, SFC licensing guidance.

The three-year rollover window is generous, but the practical timeline is shorter than it appears. Families pursuing Singapore or Hong Kong structures need to allow 6-12 months for entity establishment, licensing, and banking before they can begin asset transfers. Starting the assessment phase in 2026 preserves the full range of options.

Key aspects of the minimum tax remain subject to Treasury consultation, including the collection mechanism, franking credit treatment, and rollover relief details. The policy direction is clear. The implementation specifics will be finalized through stakeholder engagement in the months ahead.

Request a consultation to map your family’s restructuring timeline before the 30 June 2030 rollover relief window closes.

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Frequently Asked Questions

Does the 30% minimum tax apply to all trusts in Australia?

No. The minimum tax applies specifically to discretionary trusts. Fixed trusts, widely held trusts, complying superannuation funds, special disability trusts, deceased estates, and charitable trusts are excluded. Certain types of income are also excluded, including primary production income, income relating to vulnerable minors, and income from assets of testamentary trusts that existed at the time of the 12 May 2026 announcement. Australia has approximately 840,000 discretionary trusts out of over one million total trusts.

Can the rollover relief be used to move assets to an offshore family office structure?

The rollover relief is designed to support restructuring from discretionary trusts into alternative domestic arrangements such as companies or fixed trusts. Its application to cross-border restructuring should be assessed on a case-by-case basis with qualified Australian tax advisors. The relief covers income tax consequences, including capital gains tax, for those choosing to restructure during the three-year window from 1 July 2027 to 30 June 2030.

What is the minimum portfolio size to justify an offshore family office?

Singapore’s Section 13O requires a minimum S$20 million (approximately A$22 million) at the point of application. Section 13U requires S$50 million (approximately A$55 million). Hong Kong’s FIHV regime requires HK$240 million (approximately A$47 million) in aggregate net asset value. Beyond the regulatory minimums, the operational costs of maintaining a regulated offshore structure - including local staff, office presence, and compliance - typically make the structure economically viable for families with A$20 million or more in investable assets.

How does the ATO monitor offshore family office structures?

Australia’s Common Reporting Standard (CRS) and FATCA obligations mean that financial account information held in Singapore, Hong Kong, and other participating jurisdictions is automatically exchanged with the ATO annually. Family offices established in these jurisdictions are fully transparent to Australian tax authorities. This is regulated, reported restructuring - not concealment.

What happens to my existing trust distributions after 1 July 2028?

The trustee continues to determine which beneficiaries are entitled to trust income each year. The change is that the trustee now pays 30% tax on the trust’s taxable income (unless higher rates apply). Individual beneficiaries receive non-refundable tax credits for this amount, which reduces their personal tax liability. If a beneficiary’s marginal rate is already 30% or higher, there is no additional tax. Corporate beneficiaries do not receive credits, which may result in effective double taxation on income distributed through corporate beneficiaries.

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