The federal Budget has lit up a lot of feeds this week.
“Death tax.” “Trust tax.” A trillion-dollar wealth transfer suddenly under threat. Gen Z convinced they’ll inherit nothing. Baby Boomers feeling singled out.
Let me offer some steadier ground.
First: the legislation hasn’t passed. What we have right now is a proposal. The final shape of these changes – the thresholds, the trigger dates, the eligibility criteria – is still very much in play. Some of what’s being reported as settled isn’t. Parliament will have its say.
Second: this isn’t technically a death tax. Capital gains tax events happen at disposal of assets, not simply on death. The impact lands across all of society, not just one generation. And a significant portion of most Australian estates – the family home – remains CGT-free. That matters enormously, particularly given the property values we’ve seen build over the last decade.
Third: if you’re thinking about stripping your assets now to beat a 2028 deadline – pause. We counsel clients against this. Gifting significant assets during life carries real risk: family law proceedings, insolvency, changed circumstances. What feels like a clever move in 2025 can look very different in a Family Court in 2030.
What about testamentary trusts?
Even with proposed changes to how discretionary trusts may be taxed, they remain – for most families – the most effective available mechanism for protecting an inheritance and ensuring it reaches the right people. The asset protection characteristics of a trust don’t disappear because the tax treatment changes.
And Will disputes?
These have been rising steadily for a decade, driven by housing unaffordability, cost of living pressures, and wage stagnation, not by tax policy. That dynamic isn’t likely to shift materially because of the Budget.
Here’s my honest assessment; there is genuine uncertainty ahead, and that makes a review of your estate planning documents sensible. But it doesn’t warrant panic, rushed restructuring, or decisions made in response to headlines.
Steady hands. Clear advice. And a plan built to last.
If you’d like to talk through what the proposed changes mean for your specific circumstances, we’re here. And needless to say, we’re watching this closely and will report again when it’s fully settled if Parliament passes it through.
