Trust olive branch nothing but a Trojan Horse

15 September 2026

In a submission on the recently released draft trust legislation, Master Builders Australia has called out that despite the Government amending their proposal, small construction businesses will still be left in limbo with no safe way out. Around one in five small construction businesses use a trust structure to manage the volatility of the industry.

The peak body says there is a perception that under the proposal those operating as a discretionary trust can ‘deem’ those arrangements as a fixed trust arrangement, do nothing and avoid significant increases in tax. This is not correct.

In fact, the newly added option adds yet another layer of complexity with businesses being forced to consider whether to:

• Do nothing, retain a discretionary trust and incur significantly more tax;
• Restructure now, lose long standing protections and flexibilities needed in the construction sector, incur significant restructure, business and professional services cost but take advantage of some roll over relief from Commonwealth costs or,
• Take up the new option avoiding a tax increase but delaying the inevitable. These businesses still lose long standing protections and flexibilities associated with discretionary trusts immediately, but also risk losing roll over relief when there will be an inevitable future desire to change distributions and/or beneficiaries.

Master Builders Australia CEO Denita Wawn said the common-sense middle ground here is through grandfathering.

“Small building businesses continue to be left in a no-win situation that we have consistently called out since the announcement of these reforms in the Federal Budget.

“Master Builders continues to oppose the reforms. What it comes down to is that these small businesses have had the rug pulled out from under them with no way out.

“Grandfathering arrangements would offer certainty to existing businesses, particularly small businesses which make up 98 per cent of the construction industry, while enabling new businesses to make a clear and informed choice based on current legislative arrangements.

Master Builders Australia will continue to advocate in various seats for small businesses to be left alone as they say it’s crucial that local MPs around the country understand the impacts of the Government’s proposed changes.

Those concerned should head to www.leavesmallbusinessalone.com.au and email their local Federal MP.

Media contact: Dylan Hafey, Adviser, Media & Government Relations

0497 330 064 | dylan.hafey@masterbuilders.com.au