Persona · Age 52
Dr Henry
Surgeon on $450k with family trust, bucket company, properties and shares
Personal tax cut is modest at his income. The big hits: the family trust 30% min tax from 2028 costs ~$35k/yr vs a company structure, and the CGT regime change affects his investment portfolio.
30% min tax from 1 July 2028 wipes ~$35,594/yr advantage over company; rollover relief available 2027-2030 but restructuring has real cost
Post-July 2027 investment portfolio gains subject to indexation + 30% min tax; his high income means effective rate approaches 45%
Bracket cut at $450k income provides a modest benefit; lower marginal rate on $135k-$190k slice
Future property purchases lose neg gearing deductibility on established dwellings
$25B hospital agreement and Medicare investment support surgical income stability
Scores are stylised indicators based on published budget policy mechanics — not financial advice.
View in Tax CalculatorPersona 10 — Dr Henry, surgeon (the full stack)
Profile
- Age: 52
- Occupation: Orthopaedic surgeon — $450,000 employment income + practice income
- Family: wife (Sophia, $0 income — at-home; two children, 18 and 21)
- Structures:
- Family discretionary trust — historically distributes ~$300,000/yr split among Sophia, the two adult children, and a "bucket" company.
- Bucket company — receives ~$80k/yr trust distributions; sits on retained earnings.
- Investments:
- 4 negatively-geared established residential properties purchased between 2014 and 2024 (combined annual loss ~$45k).
- $650,000 ASX share portfolio held since 2010 (av. cost base $250k).
- SMSF holding additional shares — excluded from changes.
Their universe of policies
- Theme 04 §4.1 — Personal income tax
- Theme 04 §4.2 — Investment tax (CGT + neg gearing)
- Theme 04 §4.3 — Discretionary trusts
Scenarios
Scenario A — Personal income tax
- Policy: §4.1.
- Mechanic: Treasury table for $200k earnings ceiling: $4,797 in 2026-27, $5,315 from 2027-28 (up to $5,705 with the full $1,000 instant deduction). Henry is well above so he gets the full bracket-cut benefit.
- Net: +$5,315/yr from 2027-28.
Scenario B — Existing 4 properties stay grandfathered
- Policy: §4.2.4 transitional.
- Mechanic: All 4 properties were acquired before 12 May 2026 → negative-gearing rights preserved for life of ownership. His $45k/yr loss continues to offset his salary.
- CGT at sale: apportionment between pre- and post-1-July-2027 gains using ATO valuation tools or the formula. At his 47% marginal his minimum-tax floor is moot.
Scenario C — He thinks about adding a 5th property
- Policy: §4.2.3 and §4.2.4 new-build exemption.
- Decision: He pivots toward off-the-plan new build apartments to keep both negative gearing and the choice of 50% discount or indexation at sale.
Scenario D — Trust distribution under the new minimum tax
- Policy: §4.3.1 — 30% min tax on discretionary trusts.
- Source: tax-explainers-minimum-tax-discretionary-trusts.docx.
- Mechanic (Steven cameo, $200k trust income split 4 ways at $50k each): Pre-reform: total tax $24,008 (avg ~12%). Without trust, on Henry's marginal: $59,602. So the trust saves ~$35,594.
- Post 1 July 2028: Trustee pays 30% minimum tax = $60,000 on the $200k regardless of how it's split. Beneficiaries receive non-refundable credits, so they pay no additional tax on the distribution. Net: total tax becomes ~$60,000 — Henry has lost the $35,594 income-splitting benefit.
- Bucket company: previously received $80k → no longer gets credits for trustee-paid tax. This closes the bucket-company loophole.
Scenario E — Restructure to a company?
- Policy: §4.3.1 — Rollover relief.
- Mechanic: ASBFEO support from 1 January 2027. Rollover relief from CGT for 3 years from 1 July 2027 — Henry can move into a company structure with no income-tax/CGT consequences. Company tax is 25% (small-business rate, if turnover <$50M and ≤80% passive income); franking credits available; retain earnings.
- Decision: He restructures the practice income earner into a company; keeps the trust for non-business assets only, knowing those will pay 30% minimum unless distributed to high-marginal beneficiaries.
Scenario F — Sales of the long-held share portfolio
- Policy: §4.2.4 transitional CGT.
- Mechanic: Henry's $400k unrealised gain has accrued largely before 1 July 2027. All pre-1-Jul-27 gain keeps the 50% discount. Future incremental gain uses indexation. Because his marginal rate is 47%, the minimum tax doesn't bite. Net: only modest difference.
Bottom-line annual impact (combined family)
| Item | Pre-2026 | From 2028-29 | Δ |
|---|---|---|---|
| Personal tax | baseline | +$5,315 (Henry) | +$5,315 |
| Trust split saving | −$35,594 advantage | −$0 advantage | −$35,594 |
| Property NG (existing 4) | unchanged | unchanged | — |
| New property strategy | NG on established | NG via new builds (preserved) | structural shift |
| Restructure cost | n/a | rollover relief → near zero | one-off opportunity |
Net annual: Henry's family loses roughly $30,000/yr of the trust-splitting advantage from 2028-29. Personal tax cut + (minimal) CGT impact partially offsets. The biggest single change in the package for him is the trust minimum tax.
Calculator settings
Open
calculator/index.html:
- Trust tab: input $200k of trust income split among 4 beneficiaries with given other-income — see pre/post comparison.
- Property tab: add 4 grandfathered properties + a new-build option — see how new builds preserve negative gearing.
- Investments tab: add ASX portfolio with average cost-base, set sale year > 2027 to see apportioned-CGT.