With changes to the way trusts are taxed soon to be introduced to parliament, this research reveals that revenue equivalent to almost a quarter of GDP now flows through trusts. The report uses Treasury data which shows that trusts are overwhelmingly used by the wealthiest Australians. The paper proposes that the rapid growth in trusts and other changes in Capital Gains Tax, superannuation, and tax avoidance measures, make fixing the tax treatment of trusts all the more important.

Key points

• In 1990-91 there were around 326,000 trusts in Australia. By 2022–23 there were more than 1 million.
• The  most prominent form of trusts used by households and businesses are family discretionary trusts, which many high income earners use to split income between beneficiaries. 
• As of 2022–23, total gross assets held in trusts were worth $2.9 trillion, or 17% of total household assets.
• An estimated $601 billion in revenue was run through trusts in 2022–23. This represents revenue equivalent to nearly a quarter (23%) of GDP.