Todd PolkeInvestment Strategist l Wealth Coach l Speaker, Todd Polke · Investment Strategist l Helping Investors and Business Owners grow their Wealth Faster

A discretionary trust, minus the discretion.

21 Sept 2026 · 2 min

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1:38

In this YouTube commentary, the speaker warns that a Treasury draft bill proposes a 30% minimum tax on discretionary trusts effective July 2028, with no income threshold. The legislation would effectively convert discretionary trusts into fixed trusts unless the settlor opts out by naming every beneficiary, fixing their percentage shares, and maintaining identical distributions each year—a restriction even tighter than traditional fixed trusts. The speaker explains the limited ways to avoid the tax (either accept the fixed‑trust structure or pay the 30% tax and lose the ability to re‑elect), emphasizes that the proposal is still in a 14‑day consultation period, and urges viewers to consult their accountants and oppose the measure, describing it as “a load of rubbish.”

Chapters

Okay, the Treasury's just dropped some draft legislation that turns your family trust into a fixed trust, and they're selling it to you as a massive concession. Now, here's what's actually in it: 30% minimum tax on discretionary trusts kicking in from July 2028, and there's no threshold. None. Not for small trusts, not for anyone. Your trust makes income, well, you're going to be in this. Now, here's the good news. Apparently, you can opt out. All you've got to do is name every single beneficiary upfront, lock in the percentage for each and every one of them, what they're going to get, and then distribute it the exact same way every single year. So just have a think about this just for a moment. That's not a discretionary trust anymore. Where's the discretion gone? That's a fixed trust with a different name on the door. And it's actually tighter than a real fixed trust. In a real one, interest can change hands. Here, your name, your people, once and that's it. And that list can't change unless somebody dies or a relationship breaks down. Your only other way out is to walk away from the entire arrangement and go and pay your 30% tax, and you can never elect it again. Now, what are they even talking about? Look, it's not law yet, That's the whole consultation window, 14 days to rethink about your entire structures in a way where you set them up years ago based on a set of rules that they applied at the time. So what you need to know, they'll change things at any point in time. So make sure you talk to your accountant about this and you should be voting against this. It's a load of rubbish.