Many business owners assume trust distributions follow participation percentages — but under Lifetime CGT Cap and 15-year exemption rules, discretionary trusts can work very differently.
Key Trap:
For discretionary trusts, exempt distributions may be divided equally among CGT concession stakeholders, not proportionally.
Consequence:
Without planning:
- Family members may receive less flexibility
- Distribution strategies may be constrained
- Super contribution opportunities may be diluted
Big Planning Point:
Stakeholder structure before sale can materially shape post-sale tax and retirement outcomes.
Selling a Business Held in a Family Trust?
The structure of a discretionary trust and its CGT concession stakeholders can significantly affect future super contribution opportunities, retirement planning flexibility and tax outcomes.
Small decisions before a business sale may have long-term consequences for the entire family group.
Contact Us to discuss your situation and explore your options before implementing a sale strategy.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.