Craig Brooke, CEO of KeyInvest, an APRA-regulated, member-owned mutual and specialist provider of tax-effective investment bond solutions, has made the following comment in response to the 2026-27 Federal Budget.
“The Budget is one of the most significant for wealth structuring in a generation. Taken together, the confirmation of Division 296, the overhaul of the CGT discount, and the introduction of a minimum 30 per cent tax on discretionary trusts fundamentally reshape the landscape for high-net-worth clients and the advisers who serve them.
“Division 296 proceeds as legislated from 1 July 2026, with no threshold adjustments and no relief. With thresholds remaining CPI-indexed rather than linked to asset price growth, the cohort of affected clients will only grow over time. What looks targeted today becomes a structural consideration for a much broader group of Australians over the next decade.
“The replacement of the 50 per cent CGT discount with inflation-linked indexation, and a 30 per cent minimum tax on gains from 1 July 2027 further narrows the attractiveness of directly held investments as an alternative to superannuation.
“For investment bonds, where there are no CGT events on internal switching or rebalancing, this is a meaningful structural advantage that advisers should be modelling for clients now.
“Perhaps the most significant measure for advice practices is the introduction of a 30 per cent minimum tax on discretionary trusts from 1 July 2028.
“For decades, trusts have been one of the most commonly used structures for high-net-worth clients managing wealth outside superannuation. That advantage is now materially diminished. As a friendly society, KeyInvest’s investment bond structure sits entirely outside this measure, earnings are taxed internally at a maximum of 30 per cent, withdrawals are tax-free after ten years, and there is no annual personal tax reporting required. Tonight’s Budget makes that proposition more compelling than ever.
“The task is no longer about understanding these changes, it is about acting on them. Advisers who engage early and position clients across a genuinely diversified set of structures will be best placed to navigate what comes next.”
