Trusts in 2026: new Queensland laws and proposed tax changes every trust owner should know

If you own or control a family or discretionary trust, 2026 is a year worth paying attention to. Queensland's trust law has been rewritten for the first time in more than 50 years, and the Federal Government has announced significant — though not yet final — changes to how trusts are taxed. This article explains what has changed, what is only proposed, and why it may be worth reviewing your trust. It is general information only and not legal or tax advice.

Queensland's new trust law is now in force

On 28 April 2026, the Trusts Act 2025 (Qld) commenced, replacing the Trusts Act 1973 that had governed Queensland trusts for half a century. Importantly, the new Act applies to all Queensland trusts — including those set up years ago — so there is no “grandfathering” that allows existing trusts to keep operating under the old rules.

The reforms are designed to modernise and simplify trust law. Some of the key changes include the following.

Broader trustee powers. Trustees now have the powers of an absolute owner of the trust property — a wide default power — although this remains subject to the terms of your trust deed and to the trustee's duties.

Clearer trustee duties. For the first time, core duties are set out in the legislation itself, including acting in good faith, exercising reasonable care and skill, acting in the interests of beneficiaries, and keeping proper records.

New rules on who can be a trustee. People who are minors, insolvent, or otherwise disqualified are now prevented from acting as trustees, which may affect how trustees are appointed or replaced under your deed.

Stronger protections for beneficiaries. Beneficiaries now have clearer avenues to recover trust property that has been wrongly distributed, including, in some cases, directly from the person who received it.

A longer potential life for your trust

Separately, Queensland's Property Law Act 2023 increased the maximum “vesting period” for trusts — broadly, the date by which a trust must end and distribute its assets — from 80 years to 125 years, effective from 1 August 2025. Many older trust deeds were established with an 80-year life. In some cases an existing trust can be varied to take advantage of the longer period, but this needs to be approached carefully, as explained below.

Proposed federal tax changes — not yet law

At the same time, the 12 May 2026 Federal Budget proposed major changes to how trusts and capital gains are taxed. These measures are proposals only, and were not yet law at the time of writing, but they are significant enough to plan around.

A minimum tax on discretionary trusts. The Government has proposed a 30% minimum tax on the income of discretionary trusts from 1 July 2028. The tax would be paid by the trustee, and beneficiaries would receive credits that are not refundable. In practice, this could remove much of the tax flexibility that discretionary trusts currently offer, particularly where income is distributed to beneficiaries who are taxed at less than 30%. A limited number of exceptions have been flagged, but the detail will depend on the final legislation.

Changes to capital gains tax. The Government has also proposed replacing the longstanding 50% capital gains tax discount for individuals, trusts and partnerships with a system based on adjusting the cost of an asset for inflation, together with a minimum 30% tax rate on capital gains, from 1 July 2027. The change is intended to apply only to gains that accrue after that date, and the family home exemption would remain in place.

A window to restructure. Recognising that some people may wish to move out of a trust structure, the Government has proposed a three-year “rollover” period, from 1 July 2027 to 30 June 2030, that would allow eligible restructures to occur without an immediate tax bill.

Should you review your trust?

For many trust owners, the answer is yes — at least to take stock. The new Queensland law already applies to your trust, and the proposed tax changes, if they become law, could materially change the value of holding assets in a discretionary trust. A review can confirm whether your trust deed still does what you want under the new rules, whether your trustee and succession arrangements are sound, and whether your trust is well positioned for the proposed tax changes.

There is, however, an important word of caution. Changing a trust deed — for example, to extend its vesting date or to alter who can benefit — can sometimes have unintended tax consequences, including triggering capital gains tax. Reviewing a trust is not the same as changing it, and any changes should be made only after careful advice. For many trusts, the sensible outcome of a review will simply be confirmation that no change is needed.

One final point: the new trust law described here is specific to Queensland. If your trust is governed by the law of another state or territory, different rules may apply, and it is worth checking.

How we can help

We can review your trust deed against the new Queensland law, explain how the proposed tax changes might affect your circumstances, and help you decide whether any action is worthwhile — and, if so, how to take it safely. If you have a family or discretionary trust, or are thinking about establishing one, please get in touch.

This article is general information only, current as at June 2026, and does not take account of your personal circumstances. It is not legal or tax advice. Several of the tax measures discussed are proposed only and may change. Please obtain advice tailored to your situation before acting.