The May Budget's 30% minimum tax on discretionary trusts starts on 1 July 2028, and for doctors running a family trust with a bucket company, the maths is about to change. Felix Taing sits down with Mohan Sathyanarayana, Head of Tax and Business Advisory at Affluens360, to unpack why these structures worked so well, who loses under the new rules, and why bucket companies take the biggest hit. It's a tax conversation built around preparation, not panic, and it lands on one question: what does your trust deed actually allow?

Key Takeaways

• Prepare Now, Don't Panic: The rules are still being finalised, so there's breathing room, but the clock is running. Use the time to get your structure reviewed instead of rushing to your accountant at the deadline.
• Trustee Discretion Was the Whole Point: A family trust let the trustee decide at 30 June who received the income, so earnings could go to family members on lower rates and the surplus to a bucket company taxed at 25 to 30%. That flexibility is exactly what the new tax targets.
• Bucket Companies Take the Biggest Hit: From 1 July 2028 the trust pays 30% before it distributes. Individuals get a credit for that tax, although anyone on a rate below 30% can't recover the difference. A bucket company gets no credit at all.
• Read Your Trust Deed First: Most deeds sit in a safe and never get read. Before you restructure, or ask AI how to, have your accountant confirm what your deed allows, who it names as beneficiaries and who controls the trust.
• Build Every Entity With an Exit in Mind: Structures exist for asset protection and income flow as much as tax. Know which entity holds what, and whether you could close one business without unwinding the rest and handing over capital gains you didn't need to pay.
• Confusion Is Your Trigger: If you can't explain your own structure, or your adviser's explanation doesn't make sense, it's time for a review. Know what each entity is worth, and have the conversation with your accountant when the rules land.

Notable Quotes

1. "I think we need to be a rocket scientist, especially the changes that the budget has come in." — Mohan Sathyanarayana
2. "The discretion was up to the trustee to make that discretion call at the 30th of June. So that's the reason it was very, very famous with the accounting community." — Mohan Sathyanarayana
3. "What I've seen with a lot of clients, we give them a trust deed with 40 pages or 60 pages. They just lock it in a safe place and never look at it, right?" — Mohan Sathyanarayana
4. "Having the right advice and not just setting up a company just because someone said, okay, you should do that for tax benefits." — Felix Taing
5. "What I see is structuring is not tax minimization." — Mohan Sathyanarayana
6. "If you don't understand it or the advisor who is explaining it to you doesn't make any sense, it's time to change." — Mohan Sathyanarayana