Treasurer Jim Chalmers defends Budget amid Coalition claims it delivers ‘death tax’ via testamentary trusts
Treasurer Jim Chalmers has defended his Federal Budget after claims by the Coalition a minimum 30 per cent tax rate on testamentary trusts was essentially a death tax.
Treasurer Jim Chalmers has defended his Federal Budget after claims by the Coalition a minimum 30 per cent tax rate on testamentary trusts was essentially a death tax.
The major structural change to the taxation of discretionary trusts could come into effect July 1, 2028.
The Coalition has argued it would unfairly penalise families passing down assets as the trusts are used as a primary tool for inheritance.
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By continuing you agree to our Terms and Privacy Policy.Opposition leader Angus Taylor accused the government of a “hidden tax” aimed to target hard working Aussies wanting to look after their loved ones.
“There is another tax that none of us saw in the budget initially, and that’s a death duty,” Mr Taylor.
“It is very clear now that Labor is going after what I’ve known as discretionary testamentary trust.”
“This is a death duty on Australians.”
Dr Chalmers, however, hit back at the criticism as a “scare campaign” at a press conference in Canberra on Friday morning, saying that the taxation settings “haven’t changed”.
He said deceased estates, fixed trusts, and existing discretionary testamentary trusts were all exempt from the new changes.
“I want to make it really clear that we are not changing the arrangements for inheritance taxes,” he said.
“The government was very clear, and the documents on budget night were very clear that deceased estates fixed trusts, existing discretionary testamentary trusts, they’re all exempt from the changes that we made on Tuesday night,” he said.
“People can continue to set up a fixed testamentary trust into the future.
“I know that people will run all kinds of scare campaigns about this. We expect that people are trying to focus on things that aren’t in the Budget on Tuesday night.”
Mr Taylor accused Labor of being “addicted to spending” and insisted their Budget was riddled with “toxic taxes”.
“This is a government that, before the last election, said it wasn’t going to impose any of these taxes, and we keep finding new ones,” he said.
“A government addicted to spending will keep finding new taxes to impose on Australians. When a Labor government runs out of its money, it comes after yours.
“We know now there’s another hidden tax there. Who knows what else we find in the coming days and weeks.”
