Tax structuring in Perth

Tax structuring is the design work behind your wealth: which entity owns what, how income and gains move between them, and in what order. It is the least visible part of a financial plan and, for a Perth household earning $300,000 or more, frequently the part with the most at stake. Wealth without architecture is just income with anxiety.

What is tax structuring, and how is it different from tax avoidance?

Tax structuring means choosing legitimate ownership structures — personal names, companies, trusts, superannuation — and sequencing income and gains through them in accordance with the law. Tax avoidance means arrangements entered into for the dominant purpose of obtaining a tax benefit, which the general anti-avoidance rules exist to defeat. The difference is commercial purpose.

This distinction is the whole game, and it deserves to be stated plainly on a public page rather than left implied.

A structure that exists for a real reason — to hold a business, to protect assets, to provide for a family, to fund retirement — and which happens to be tax-efficient, is sound planning. A structure with no purpose other than to produce a tax outcome is exposed, under Part IVA and, for trust distributions, under section 100A. The ATO's compliance attention in this area has increased, not decreased.

We do not do the second kind of work. If that is what you are looking for, we are not the right firm — and it is cheaper for both of us to establish that now.

Why does 1 July 2027 matter?

From 1 July 2027 the 50% CGT discount for individuals, trusts and partnerships is replaced with cost base indexation plus a 30% minimum tax rate on capital gains, and negative gearing on residential property is limited to new builds. Properties held at 7:30pm AEST on 12 May 2026 are exempt from the negative gearing change.

This is now law, not a proposal, and it is the most significant change to the taxation of investment assets in a generation. Three consequences follow.

The value of holding an asset personally or in a trust changes. The 50% discount has been the central assumption behind Australian investment structuring for twenty-five years. Replacing it with indexation and a 30% minimum rate changes the arithmetic of where a growth asset should sit — and does so differently depending on the holder's marginal rate and the asset's expected holding period. Complying superannuation funds are not affected in the same way, which alters the relative case for holding growth assets inside super.

Timing decisions become real decisions. The CGT reform applies to gains accruing after 1 July 2027. That means the treatment of a gain can depend on when it accrues, which makes the sequencing of a disposal a genuine planning question rather than an administrative one.

Existing property portfolios are grandfathered, but only in part. The 12 May 2026 exemption applies to the negative gearing change for properties held at that time. It does not make the rest of the reform disappear, and it does not extend to properties acquired afterwards — so a portfolio built in stages may now have two different sets of rules operating inside it.

A structure designed before May 2026 was designed for a world that ends on 1 July 2027. That does not automatically mean it needs changing. It does mean it is worth looking at, with time to act.

Which entity should own an asset?

There is no universally best entity. The choice depends on your marginal tax rate, whether income needs distributing, how long the asset will be held, asset protection needs, and what happens on death. The wrapper an asset sits in frequently matters more to the after-tax outcome than the asset itself.

The single most common structural error we see is not choosing the wrong entity. It is choosing a sensible entity for the circumstances of 2015 and never revisiting it after a divorce, a business sale, a child, an inheritance or a doubling of income.

What are the tax rates for 2026–27?

For 2026–27 the resident rates are nil to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above that, plus the 2% Medicare levy. The 30% bracket is scheduled to fall to 14% from 1 July 2027, which changes the arithmetic of deferring income across that date.

Plus the Medicare levy of 2%. The point of publishing this is not the table itself — it is that a scheduled rate change sitting on the same date as the CGT reform makes 1 July 2027 a hinge for both income and capital decisions at once. Very few plans currently account for both.

How do high income earners manage Division 293 tax?

Division 293 imposes an additional 15% on concessional contributions for individuals whose income plus those contributions exceeds $250,000. It cannot be avoided by declining to contribute, because contributions are still concessionally taxed overall. The strategy question is how much to contribute and where the remaining surplus should go instead.

It also cannot be avoided by reducing taxable income: the threshold is based on an adjusted income figure that adds back reportable fringe benefits, concessional super contributions and net rental losses, so packaging or gearing income away does not move you below the line.

The common reaction to a Division 293 assessment is to conclude that superannuation has stopped being worthwhile and to stop contributing. That is usually the wrong response, because even with the additional 15% the total tax on a concessional contribution generally remains below the top marginal rate. The right question is not whether to contribute but how much, and where the next dollar goes after the cap is used.

The genuinely useful decisions in this area are unglamorous:

• Whether the concessional cap is being used deliberately rather than by default through employer contributions.
• Whether carry-forward room from earlier years exists, and whether using it is sensible given the Division 293 position.
• Where surplus income goes once the cap is used — which is an entity question, and the reason this sits on a structuring page rather than a superannuation one.
• Whether the assessment can be paid from the fund or should be paid personally.

Should I use a family trust?

A discretionary trust is useful where there are genuinely different marginal rates in a household, where asset protection matters, or where succession needs flexibility. It is not useful where all the income is earned by one person on the top rate and there is nobody to distribute to. It also carries annual compliance and section 100A scrutiny.

Trusts are oversold to people who cannot use them and under-used by people who can. Three things to weigh:

A trust does not necessarily reduce tax. It allocates income to beneficiaries who are then taxed at their own rates. If everyone in the household is already at the top rate, the trust achieves asset protection and flexibility but very little tax outcome.

Distributions must be real. Section 100A has made arrangements where a beneficiary is presently entitled to income they never actually receive a live compliance risk. Distribution resolutions need to be made properly, before year end, and reflect something that actually happens. A corporate beneficiary changes the arithmetic but not the requirement that distributions are genuine.

A 30% minimum tax on discretionary trust distributions has been announced from 1 July 2028 and is not yet law. It was announced in the Budget on 12 May 2026, and a three-year restructure rollover has been proposed from 1 July 2027. Until it is legislated, the sensible posture is to avoid building anything that depends on the current treatment continuing indefinitely, while not dismantling a structure that works on the strength of an announcement.

Is negative gearing still worth it?

For properties held at 7:30pm AEST on 12 May 2026, the existing negative gearing treatment continues. For residential property acquired after that time, deductions are limited to new builds from 1 July 2027. Any strategy premised on buying an established rental property and offsetting losses against salary now works differently.

The strategy that has driven a great deal of Australian investment behaviour for two decades has been narrowed to a specific category of asset. That is not the same as being abolished, and the grandfathering is meaningful for existing portfolios.

What it does change is the reason for buying. An investment that only worked because of the deduction was always a weak investment wearing a tax costume. The reform removes the costume for most new acquisitions, which will make some purchases obviously unattractive and leave the genuinely good ones unaffected.

How is tax on selling a business handled?

The small business CGT concessions can substantially reduce or eliminate tax on the sale of an active business asset, but eligibility depends on tests applied at the time of sale — and on how the business was structured years earlier. Most of the planning has to happen before a sale, not after. By the time a contract is signed, the options have largely closed.

This is the highest-value and most time-sensitive work we do, and the most common way it goes wrong is timing. We are frequently contacted after heads of agreement have been signed, at which point the structure is what it is.

The questions that determine the outcome are settled long before the sale: which entity holds the goodwill, whether the shares or the assets are being sold, whether the relevant tests are satisfied at the moment of the CGT event, where the proceeds will land, and whether superannuation contribution room has been preserved to receive part of them. Each of those has a lead time measured in years.

Where a sale is expected within five years, there is usually still time for the structure to matter. Eligibility for each concession must be confirmed against the current rules at the time — the tests are detailed, and we do not summarise them numerically here, because a partial summary of an eligibility test is worse than none.

When should I restructure?

Restructuring is worth considering when circumstances have changed materially — a business sale, a large income rise, a property purchase, a relationship change, an inheritance — or when the rules change, as they do from 1 July 2027. Restructuring is not free: it can trigger CGT and duty, so the benefit has to exceed the cost of moving.

The honest position is that restructuring is often not worth it. Moving an asset between entities is a taxable event unless a specific rollover applies, and duty may be payable. We have told clients to leave a suboptimal structure alone more often than we have recommended changing one, because the cost of the move exceeded the benefit over the remaining holding period.

What is changing is that a three-year restructure rollover for discretionary trusts has been proposed from 1 July 2027 in connection with the announced 2028 trust measure. If it is legislated, it would create a defined window in which some restructures become materially cheaper. It is not law yet, so it is worth tracking rather than planning around.

What tax structuring cannot do

Structuring cannot make a bad investment good, cannot produce a deduction without a real expense, and cannot defeat the general anti-avoidance provisions. It also cannot be applied retrospectively — by the time a gain is realised or a contract is signed, most of the available options have already closed.

We include this section because the pages competing with this one generally do not, and because the expectations people arrive with are frequently the real problem. There is no structure that turns a 45% marginal rate into a 15% one on employment income. There is no arrangement that makes private consumption deductible. Anyone suggesting otherwise is describing a risk, not a strategy.

What we do

We design the structure and the sequence, then coordinate implementation with your accountant and solicitor — we do not replace them. Fees are agreed with you before any work starts. Where the existing structure is sound, we will tell you and recommend leaving it alone.

Most of the value here is in the order of operations rather than in any single decision.

How do I get tax structuring advice in Perth?

Start with a Wealth Gap Conversation — a no-obligation discussion about your structure and what is coming. Given the 1 July 2027 changes, earlier is materially better than later. Justin Porrins is a CFP® and SMSF Specialist Advisor™, ASIC Adviser No. 250071, based in Perth. He responds personally within one business day.