Convert a family trust to a company, with Melbourne restructuring lawyers.

The minimum tax would put a 30% floor under trust income from 1 July 2028. Distributions to a corporate beneficiary would no longer carry an offset, which removes the bucket company as a pressure valve. And, under a separate Budget measure, the 50% CGT discount for individuals and trusts would be replaced by indexation from 1 July 2027, while companies, which never had the discount, are untouched. Taken together they narrow the gap that made a trust the default for a family business or an investment portfolio. They do not close it: a company has no discount to lose, but it also has no discretion, and it comes with Division 7A, land tax grouping and a different answer on asset protection.

The transferee cannot be a charity or other exempt entity, a superannuation fund, or the trustee of another discretionary trust. A company is the usual choice; an individual, a partnership or a fixed trust are also permitted.

The roll-over is designed to empty the trust, not to let it hand over the assets with gains and keep the rest. If, at the end of the window, any asset that should have been transferred is still held by the trustee, the roll-over is unavailable for every asset, including those transferred years earlier, and the Commissioner is given an extended period to amend the assessments of the trust, its beneficiaries, the company and its shareholders.

The draft excludes a short list from the requirement: assets that cannot legally be transferred, capital gains tax assets used in a primary production business, assets reasonably kept back to meet the trust's liabilities (including tax and indemnities), assets kept to pay the costs of winding the trust up, and low-value assets. Everything else goes. Working out what "everything" is, before the first transfer, is the part most often skipped.

The roll-over is denied if, in the period from the last transfer to the end of the fourth income year after it, there are material discretionary elements affecting the rights or interests of the company's members. The draft points to what passes: members with clearly defined and enforceable rights to all of the income and capital, or to governance; powers to issue new shares or vary rights that cannot significantly vary existing rights or affect their value; and a constitution that can only be amended with every member's consent or in a way that cannot adversely affect members. A share structure that lets the directors decide each year which class receives the dividend is the thing the test is written to catch. The Minister may also declare, by instrument, what does and does not count. The constitution is where this is won or lost.

The roll-over is Commonwealth income tax law. It does not relieve Victorian transfer duty on land moving from the trustee to the company, or landholder duty on the shares issued in a company that holds land. It does not change land tax, where a company is assessed at general rates but grouped with related companies and loses the principal place of residence exemption that an individual might have had. It says nothing about GST on business premises, Division 7A loans to family members after the restructure, mortgagee consent to the transfer of a secured property, landlord consent to assign a lease, or a will that was written around the trust.

A transfer before the window has no roll-over, so the transfers themselves wait. The work that takes longest does not: valuations, bank consents and refinancing, landlord consents, a duty ruling where one is worth seeking, the constitution, and the wills. A restructure that is planned in 2026 and 2027 and executed in the first year of the window leaves two years of margin for the asset that proves hard to move. One planned for 2030 leaves none.