Implement a minimum tax rate of 30 per cent on discretionary trust distributions to mature beneficiaries (individuals over 18 years of age).

• The minimum tax rate would be applied to the total trust distribution, rather than on a marginal basis. Non-trust income would continue to be taxed at marginal rates, with an individual’s tax liability on this income assessed exclusive of discretionary trust income.
• Trust distributions relating to primary production income would be exempt from the minimum tax rate.
• Discretionary trust distributions to people undergoing serious hardship (for instance, those with a disability) would be exempt from the minimum tax rate at the discretion of the Commissioner of Taxation.
• The minimum tax rate would not apply to distributions from discretionary charitable trusts, deceased estate trusts, or testamentary trusts.

The proposal would take effect from 1 July 2019.