15/10/2026
My experience of trusts in places where I've been office manager (and thus paymaster) are that they are ALWAYS used to reduce tax otherwise payable.
I was an accountant, but I know accountancy is boring. While I have to talk a bit about the accountancy, I'll keep the tech stuff out.
First time I saw a trust it ALSO had the aim of reducing workers' compensation premiums in the early 1990s. THIS is now no longer allowed.
I was working for a factory where there was glass-cutting, and frequent use of aluminium and MDF cutting equipment. It was dangerous stuff, and the Workers' Comp premium reflected that.
But I worked in the office, along with half a dozen others as well as the sales team. We were employed not by the Pty Ltd company that operated the business; we were employed by a trust which was set up as a mangement service provider.
This company basically said "we will administer your company and charge a fee for it, and your business doesn't have to worry about things like that".
Of course the trustees were also directors of the associated Pty Ltd company.
So the trust got Workers' Comp insurance (it's a legal requirement) but for office workers only, which was heaps cheaper than the factory premiums. This saved a lot.
The trust was also used to employ the wives and sons of the directors. They would be paid a wage such that the total tax payable (not the marginal rate) was 30%. As office manager I'd only see these people once in a blue moon, but they were on the books as employees.
And the kicker is, this management company could charge a management fee, and that fee was totally arbitrary.
If the management company was independent and charging like this, you'd be crazy to not get quotes from other management companies. But of the course the point of this is so money can be take out of the Pty Ltd company into the trust.
And back then, trusts were only taxed at 15%! That's less than any personal tax or company tax rate, so there's a massive advantage.
And because it's a "DISCRETIONARY" trust, it can pay money to anyone for anything.
I was going to write about other places I've worked where trusts were employed, but I reckon you've got the idea now.
The indignation at changing tax rates on trusts is coming from the 5% of Australians who have trusts. Surely.
It's completely unfair and I salute Albo for finally doing something about an obvious tax doge that no-one wants to admit IS a tax dodge.