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Two tax changes could materially alter how Australians own investments and use family trusts.

The first is Division 119, which has already been legislated and will impose a minimum 30% tax on capital gains made after 1 July 2027. The second is a proposed minimum 30% tax on distributions from discretionary family trusts, including both income and capital gains, from 1 July 2028.

The interaction between these measures creates a serious problem. Under the draft legislation, a capital gain distributed through a family trust could effectively be taxed twice. In the most extreme example, a beneficiary with no other taxable income could pay $6,000 of tax on a $10,000 capital gain—an effective tax rate of 60%. While this may be an unintended consequence, the government has not addressed it in the draft legislation.

In this episode, I explain how the proposed rules work, why they reduce the tax benefits of distributing income to adult children or lower-income spouses, and whether family trusts remain worthwhile.

The answer is that tax is only one consideration. Family trusts can also provide valuable flexibility, asset protection, estate-planning benefits and an effective structure for transferring wealth between generations. That flexibility becomes increasingly valuable as an investment portfolio compounds and life circumstances change.

I also share a real client example where a portfolio established in a spouse’s personal name grew to $3 million within 10 years. With the benefit of hindsight, a family trust would have produced a better long-term outcome. It is a useful reminder that focusing too heavily on simplicity and short-term costs can sometimes work against you.

If you already have a family trust, our default position is to do nothing for now. The proposed rules are not yet law, will not commence until July 2028 and could be redesigned, delayed or repealed before then. A proposed 3-year restructuring window may also allow assets to be moved into personal names, a company or a fixed trust without triggering capital gains tax, although stamp duty remains an important unresolved issue.

For investors establishing a substantial portfolio - particularly one likely to exceed approximately $800,000 to $1 million - we remain inclined to use a family trust where that would otherwise have been the appropriate structure. If the rules eventually take effect, restructuring into a company may provide an attractive alternative.

The central message is simple: don’t make permanent investment decisions in response to legislation that is neither final nor certain to survive. Preserve flexibility, take a long-term view and avoid jumping at shadows.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Four listeners at genuine turning points. "Steve," 48, with a wife of 54 and a large cash holding, knows he's too conservative and wants to move into ETFs ahead of retirement at 57, while supporting a special-needs adult child and navigating his wife's super unlocking first. How should that shape the inside-versus-outside-super split?

An anonymous couple on the Mornington Peninsula, 39 and 40, have built a four-property-plus-SMSF portfolio but zero borrowing capacity, and want to be work-optional by 50. Their question: how to convert growth assets into income to bridge the pre-retirement gap, build shares now, sell down resi into commercial, or buy a PPOR while Melbourne's affordable? And how worried should they be about sequencing risk?

Nick, debt-free at 31 with three young kids, can't shake the feeling that sitting mortgage-free leaves money on the table; should he debt-recycle or draw equity into ETFs, despite disliking debt?

Finally, "Paul," 35 and undeterred by the tax changes, asks the sharpest question of all: is this downturn just another one to ride out, or is it different when a government is actively trying to suppress house price growth?

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

If you're following the case for going underweight Australian shares and leaning into global developed markets, you inherit a new question: what do you do about currency risk?

Every international investment has two return drivers: the underlying market, and movements in the Australian dollar, and this episode is a clear-eyed guide to whether you should neutralise the second.

Stuart explains what hedging actually does, why it never removes 100% of currency risk, and the single most misunderstood aspect of it: interest rate differentials. 

Because Australia's cash rate currently sits above the US, hedging US exposure earns a modest positive carry, but that relationship can just as easily work against you. 

He weighs the real trade-offs: the Aussie dollar is a "risk currency" that falls in a crisis, so staying unhedged can act as a shock absorber when markets tumble, while hedging makes more sense when the currency trades well below fair value.

He also covers a crucial and overlooked detail, the TOFA hedging election and its tax consequences, why bonds should almost always be hedged, and what the academic research says. 

The upshot: their default is unhedged for shares, favouring hedging only as the dollar approaches US60 cents.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Three listeners wrestling with structure and second-guessing. "Marty," an Adelaide doctor who's become genuinely financially literate since engaging a planner two years ago, feels his arrangement is messier than it should be: managed funds underperforming at a 2.9% IRR, borrowed money in the trust, and a cash-flow plan he's no longer sure about.

 He asks whether to pause super contributions, rethink gearing inside the trust given a possible 30% distribution floor, and what broad direction to take back to his adviser (or a new one).

"Angela," transitioning to retirement in Sydney, faces a painful crossroads: her Upper North Shore home has fallen in value after a downsizing purchase, and a plan to shift half into a company has surfaced an unexpected landholder duty trap. Should she crystallise the loss now or hold long-term?

Finally, a low-income investor living entirely off investments worries the proposed 30% minimum tax on capital growth sits above their marginal rate, upending a strategy built on selling international share growth. What are the alternatives when yield-chasing ETFs rely on covered calls, and markets sit at all-time highs?

Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

Quarantining negative gearing doesn't just reduce a tax benefit; it can blow a hole in an investor's cash flow. Take a property with a $30,000 annual shortfall: previously, offsetting that loss might have clawed back $12,000–$14,000 in tax, bringing the real cost to around $16,000–$18,000. Now that loss must be carried forward, potentially for 10 to 20 years, leaving the investor to fund the full $30,000 upfront. For many, that makes established property simply unaffordable.

In this episode, Stuart explores a financing structure to bridge that gap, borrowing the negative gearing benefit you no longer receive upfront, and repaying it when the deferred deduction is eventually realised. The goal is to align your cash outlay with the timing of the tax benefit, rather than paying years ahead of it. Crucially, it also frees investors to focus on asset quality rather than chasing yield in inferior locations.

He's characteristically balanced: this isn't a case for property over shares (which remain more effective), the numbers involve real trade-offs (a higher return but roughly 15% less wealth in dollar terms), and it demands equity, discipline and the right temperament. Get personalised tax and credit advice before acting.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Four listeners bring sharp, forward-looking questions. "Tony" wonders whether super recontribution strategies, used to cut the taxable component and reduce death benefit tax, could be the next target for a budgetary hatchet, and asks for Stuart's view without giving the government any ideas.

An anonymous listener, 37, mortgage-free on a rural Victorian property with $300k in cash, feels he's at a genuine crossroads: use a buyer's agent to acquire an inner-Melbourne house and hold, or aggressively invest into ETFs and super toward a $120k perpetual income? Stuart weighs the two paths. Tom, 36, with seven properties and a fast-growing portfolio, asks whether to keep buying with his available equity, whether his ETF choices stack up, whether to sell some property to build shares, and whether to diversify his property-only SMSF into something like VGS.

Finally, Alf poses an intriguing technical question: can you recycle equity from a grandfathered, pre-Budget investment property to buy new assets, and still negatively gear the newly drawn interest, since the underlying property isn't subject to the new rules?

Practical thinking on structure and sequencing throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

Melbourne has tested investors' patience like nowhere else. Its median house price has grown just 1.8% a year since early 2017, below inflation, meaning that, in real terms, property is cheaper today than it was almost a decade ago. Naturally, investors want someone to blame. But in this episode, Stuart argues the usual suspects are largely wrong.

Victoria's land tax regime, tenancy reforms and ballooning state debt get cited endlessly, and Stuart doesn't dismiss them. Still, he shows why the links to prices are weaker than they appear (in one case, buying another Brisbane property triggered a higher land tax bill than going to Melbourne). 

The real driver, he contends, is what came before: an almost uninterrupted 20-year boom from 1997 to 2016, unmatched by any capital city in 45 years of data. The longer the boom, the longer the correction needed to work off the gap.

Using a declining long-run growth benchmark, Stuart's analysis puts Melbourne houses around 21% below trend and apartments 29%, the clear outlier while Brisbane, Adelaide and Perth run well ahead. With replacement costs now exceeding market values, he makes the case Melbourne may be intrinsically undervalued, and explains how to think about whether to hold or sell.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Six listeners grapple with how the new tax landscape reshapes their thinking. Nick, six years into regular ETF investing, asks whether to keep his current setup or start fresh for cleaner record-keeping, and whether a trust is now worth considering mid-journey. Matthew and Michael both probe the fine print: does the "property in a company" strategy become more attractive under a 30% minimum CGT rate, and does debt recycling for an IP deposit still preserve deductible interest?

Michelle explores buying a one-bedroom apartment as tenants in common with her 25-year-old daughter, using gifted shares as a deposit, plus whether capital gains can be directed into super. Danny lays out an ambitious Canberra-based portfolio and asks the big question: can he realistically achieve a $2.5M Perth home and a $200k perpetual retirement income within ten years without dismantling what he's built?

Finally, Daniel wants the rules around accessing super at 60 while continuing to work, what "retirement" actually requires, how brief a pause counts, whether a younger working spouse matters, and where transition-to-retirement fits.

Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

It's been fascinating to watch how differently asset classes have performed lately, share markets delivering strong double-digit returns while unlisted commercial property trusts and residential property in Melbourne and Sydney have struggled.

But this episode isn't about which asset class wins. It's about something quietly more important: liquidity, and the optionality it buys you.

Liquidity is how quickly and cheaply you can turn an asset into cash without disruption, and crucially, it's not about whether you expect to need cash, but whether you can access it if your circumstances, your view, or the risks change. 

Campbell makes the balanced case for both sides. Liquid, listed assets let you invest gradually, rebalance with new capital, manage concentration, and control your tax timing, but they also make it dangerously easy to act on emotion. 

Illiquid assets can protect you from your own worst instincts and give you control over the asset itself, but you don't really know what they're worth until you sell, and "liquid" unlisted funds can freeze redemptions exactly when it matters.

The real insight? The right level of liquidity shifts across your lifetime, and knowing when illiquidity stops working for you is the key.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Six listeners bring some genuinely meaty questions. Sandy digs into the technical weeds of owning property through a company—whether a discretionary trust as sole shareholder forfeits the NSW land tax threshold, and how the 25% versus 30% company tax rate applies when a capital gain lands. Prashant asks for a candid critique of his simple, four-ETF debt recycling portfolio and its cash-flow reality.

Mark poses a clever SMSF puzzle: is deliberately exceeding the concessional cap effectively an interest-free loan from the ATO—and what's he missing? Shiva wants Stuart's read on whether the CGT changes will choke listings, push prices up, and collide with reduced borrowing capacity.

Then two relatable crossroads. "Nick" in Hobart weighs a granny flat build that won't add net capital value—asking what else should inform the decision, and whether to simply wait for child support obligations to taper. And Justin, 32, having pivoted from high-income mining to community services, faces a construction crunch: sell the investment property he believes in, or stretch to refinance and keep it?

Structural nuance and real-life trade-offs throughout—with the usual reminder that these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.