Federal Budget 2026–27: Navigating Change with Confidence

The recent Federal Budget has certainly captured attention, and for many of our clients, particularly those with investment properties or more complex structures, it has also created some understandable concern.

There is no doubt that this Budget introduces significant change. Reforms to negative gearing, capital gains tax and the taxation of discretionary trusts represent a shift in how investment and business structures will be treated in the future.

However, it's important to take a step back.

While the headlines may feel confronting, this is not all doom and gloom. With careful planning, considered decision-making and the right advice, there are still very real opportunities to manage your tax position effectively and continue to build long-term wealth.

A Shifting Landscape- But Not an Unmanageable One

The Government has framed these changes as part of a broader push to improve economic resilience and tackle long-term structural issues in the tax system. For investors, this includes:

• Limiting negative gearing on residential properties to new builds from 1 July 2027
• Replacing the 50% capital gains tax discount with an indexation approach and introducing a minimum tax on capital gains

For business owners and those using trust structures, the introduction of a 30% minimum tax on discretionary trust income from 1 July 2028 is also a significant development.

These are material changes- but importantly, they are not immediate, and in many cases, transitional rules and concessions will apply.

What This Means for Clients

As these reforms take shape, there are several areas where investors and business owners will need to think carefully about their position.

Restructuring opportunities

There will be a window of opportunity to restructure from discretionary trusts into companies or fixed trusts, supported by rollover relief provisions. This may present planning opportunities- but any decision must also take into account stamp duty implications and broader commercial considerations.

Use of bucket companies

For those who have traditionally used bucket companies to cap tax outcomes, the interaction with the proposed trust minimum tax means alternative structuring strategies may need to be explored to avoid potential double taxation.

Testamentary trusts

Testamentary trust structures, often used in estate planning, may also need to be revisited to assess whether they continue to deliver the intended benefits under the proposed framework.

These are not one-size-fits-all decisions. Each requires careful modelling and consideration of your individual circumstances.

Avoid Knee-Jerk Reactions

One of the most important messages we want to emphasise is this:

Do not make off-the-cuff changes. At this stage, many of the measures announced in the Budget are proposals. The detail will continue to evolve as legislation is drafted and ultimately passed through Parliament.

History tells us that what is announced on Budget night is not always what becomes law in its final form.

Making structural decisions too early could:

• Trigger unintended tax consequences
• Create stamp duty costs
• Limit flexibility if the rules ultimately differ from what is currently proposed

A Measured Approach

The right approach in the current environment is:

• Stay informed
• Understand how the proposed changes may apply to you
• Model potential outcomes before making any changes
• Seek professional advice before implementing any restructure

At WSC, we are already working through these measures in detail and considering how they may impact our clients across different scenarios. As more clarity emerges, we will be proactively engaging with you to ensure your structures remain fit for purpose.

Final Thoughts

While this Budget represents a shift, particularly for investors and those using discretionary trusts, it does not remove the ability to plan, structure effectively and manage tax outcomes.

In fact, it reinforces the importance of doing so.

With the right advice and a disciplined approach, there is every opportunity to navigate these changes calmly and confidently. If you would like to discuss how these changes may affect your circumstances, please feel free to reach out to our team.

2026 Federal Budget Overview

Download our overview of the 2026 Federal Budget:

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Disclaimer: This article is intended to provide general information only and does not constitute financial advice. It is based on publicly available guidance from the Australian Taxation Office (ATO) and other regulatory bodies. Before making any decisions regarding your superannuation or SMSF, we recommend seeking advice from a licensed financial adviser or SMSF specialist who understands your individual circumstances.