<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Labor has accused the opposition of running a scare campaign after they spruiked claims the government will tax "death" trusts.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Budget papers showed that new discretionary testamentary trusts - trusts set up within a will that comes into effect on the event of a death - would be subject to a 30 per cent minimum tax rate.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Existing discretionary testamentary trusts and fixed testamentary trusts would be unaffected.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/2-point-7-billion-dollars-in-free-money-sitting-unclaimed-by-aussies/4d61d174-707d-4f39-9642-7f01bd677059" rel="" target="_blank" title=""><strong><span>$2.7 billion 'free money' sitting unclaimed by Aussies</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Opposition leader Angus Taylor said this morning that applying a 30 per cent tax rate on discretionary testamentary trusts was a "death duty on Australians".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Treasurer Jim Chalmers said the budget papers were very clear that existing trusts were unaffected and people had the choice to use a fixed testamentary trust to avoid paying the minimum tax.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"People can continue to set up a fixed testamentary trust into the future but to be really clear, the arrangements, the exemptions for decreased states, for fixed trusts and for existing discretionary trusts, they haven't changed," he told reporters.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/federal-budget-2026-labor-accuses-the-opposition-of-running-scare-campaign-over-death-tax/c0f3618b-8da0-4cd1-81d4-c96d37717a9d" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Chalmers then accused his counterparts of running a scare campaign. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"I know that people will run all kinds of scare campaigns about this, we expect that," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"People are trying to focus on things that aren't in the budget on Tuesday night because they don't want to engage on the things in the budget on Tuesday night."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-negative-gearing-property-investor-new-build-exemption-trap-interview/3bb1deac-b1a4-44f1-b3bb-8745049014cc" rel="" target="_blank" title=""><strong><span>Don't fall for this negative gearing 'trap,' property investor warns</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Discretionary trusts were part of the government's trio of tax reforms delivered to address intergenerational inequity in the federal budget this week. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>From July 1, 2028, discretionary trusts will be hit by a 30 per cent minimum tax to be paid by the trustee. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This did not include any widely-held trusts like deceased estates, superannuation funds, special disability trusts and charitable trusts.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The budget papers said that while there were legitimate reasons to use discretionary trusts, the numbers had doubled over 20 years with some using them to pay a lower tax rate.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The wealthiest 10 per cent of households hold over 90 per cent of the value of private trusts, the majority of which are discretionary trusts," the budget papers said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Relief would be provided to small businesses and others who want to restructure out of a discretionary trust into a fixed trust. </span></div></div><div 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