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Discretionary trusts, often referred to as family trusts, have been a popular structure for Australian families and businesses for many decades. They are commonly used to operate family businesses, hold investments and assist with succession planning. Their flexibility, together with asset protection and estate planning benefits, has made them an attractive option for many groups. In the 2026–27 Federal Budget, the Government announced a significant proposed change. From 1 July 2028, trustees of discretionary trusts would generally be required to pay a minimum tax of 30% on the trust's taxable income. According to the Government, the proposal is intended to better align the tax paid on trust income with that paid by salary and wage earners, while reducing opportunities to split income between family members. However, the announcement has generated considerable debate. Professional bodies, business groups and tax advisers have expressed concerns that the changes could increase complexity and compliance costs for many genuine family businesses and investment structures. How the proposal is expected to work Under the proposal, the trustee would generally pay the minimum 30% tax on the trust's taxable income. Where trust income is distributed to individual beneficiaries or certain other non-corporate beneficiaries, those beneficiaries would generally receive a non-refundable tax offset recognising the tax already paid by the trustee. This is intended to reduce the risk of the same income being taxed twice, but while maintaining the impact of the 30% minimum tax rate. Importantly, the minimum tax would not apply to every trust. The Government has indicated that a number of trusts would be excluded, including fixed trusts, widely held trusts, complying superannuation funds, charitable trusts, deceased estates, special disability trusts and genuine testamentary trusts. Primary production income and certain income relating to vulnerable minors would also be excluded. The Government has also stated that more than 90% of small businesses are not expected to be affected. While that may be reassuring for some taxpayers, there are still some important issues that could affect family groups using discretionary trusts. What could this mean in practice? One area likely to receive close attention is the use of companies as beneficiaries of family trusts. Many family groups have historically distributed some trust income to a company. This can provide flexibility in managing cash flow, retaining profits within the business and funding future growth. Under the proposed rules, however, the corporate beneficiary would not receive a tax offset for the tax already paid by the trustee. In many cases this will mean that income distributed from a discretionary trust to a company would be subject to double taxation. Another practical impact of the proposed change is that some family groups may find it more difficult to fully utilise existing tax losses. While the impact will depend on each group's circumstances, the proposed minimum tax is likely to reduce some of the flexibility that currently exists when managing taxable income across a family structure within many groups. The Government has also proposed a temporary three-year rollover period, commencing from 1 July 2027, to help restructure into alternative business structures, such as companies or fixed trusts, without triggering immediate income tax or capital gains tax consequences. While this may assist some groups, restructuring is rarely straightforward. Depending on the circumstances, it might be necessary to consider things like stamp duty, loan approvals, financing arrangements, contract changes, licensing requirements and professional advice. Even relatively simple restructures can involve significant time and cost, so careful planning will be important. The rules are not yet final At this stage, the proposal remains subject to consultation. Treasury released a consultation paper in July 2026 seeking feedback on a range of design issues, including how the new rules would operate in different situations. Final legislation has not yet been introduced, meaning aspects of the proposal could still change before the rules become law. For this reason, most groups utilising discretionary trust structures should avoid making major structural decisions based solely on the announcement. Instead, it is sensible to monitor developments while considering whether existing structures are likely to remain appropriate if the proposal proceeds. What should you do now? For many families, discretionary trusts are about much more than tax. They can continue to provide valuable asset protection, succession planning and business flexibility. The proposed changes do not remove those benefits, nor do they prevent discretionary trusts from continuing to be used. However, the proposal does have the potential to change the tax outcomes for some family groups, particularly those with more complex structures or those that regularly distribute income to companies. With the proposed start date still some time away, there is an opportunity to pause and carefully understand how the changes may affect your circumstances and consider if any planning or restructuring might be appropriate. As the legislation develops, we can help you assess the impact on your business or investment structure and determine if any action is warranted.

What you need to know before 1 October 2026 The Reserve Bank of Australia (RBA) has confirmed that all surcharges on credit and debit card payments — across EFTPOS, Mastercard and Visa — will be banned from 1 October 2026. This represents one of the most significant updates to Australia’s payments landscape in years and will have a direct impact on businesses and consumers. Why this matters Australians pay an estimated $1.6 billion in card surcharges every year. At the same time, businesses collectively bear even higher card-acceptance costs behind the scenes. Under the new rules, total merchant payment costs are expected to fall by around $910 million per year, with small businesses likely to see the largest percentage savings. For many businesses this will mean simpler pricing, fewer compliance headaches and potentially better margins — but it also means some preparation is needed. What’s changing? The RBA’s reform package has three key components: 1. Surcharges banned From 1 October 2026, businesses cannot add any surcharge — percentage or flat fee — for payments made using eftpos, Mastercard, Visa or related networks. Customers must see and pay one final price, whether they purchase online, at the counter, or via mobile payment. 2. Lower interchange fees Interchange fees (the wholesale fees charged between banks when a customer pays by card) will be reduced, with new caps for foreign-issued cards. This should directly lower the cost that a business needs to pay to accept card payments. 3. Greater transparency Banks, card schemes and payment providers must publish clearer information about fees and margins. They must also demonstrate how reductions in wholesale fees are being passed through to retailers. This gives businesses more power to compare providers and negotiate. These changes are supported by oversight from the Australian Competition and Consumer Commission (ACCC) and guidance from the Australian Small Business and Family Enterprise Ombudsman. What your business should do now 1. Review your merchant fees Look at your recent statements and determine: How much you currently pay in card-acceptance fees; and Whether you have been relying on surcharges to offset part of those costs. If surcharges are part of your pricing strategy, you may need to adjust prices to maintain margins, where commercially appropriate. 2. Speak to your payment provider With lower interchange fees coming and more transparency required, it’s a good time to negotiate: Better merchant service fees Updated pricing plans POS or terminal upgrades Small businesses often pay closer to the current fee caps, so they stand to gain the most. 3. Update your pricing and POS systems You’ll need to remove: Surcharge signage Online checkout surcharges Automatic percentage add-ons All displayed prices must become all-inclusive. 4. Build changes into your cash flow Lower merchant fees won’t appear immediately, but most businesses should see reduced costs flow through during the 2026–27 financial year. This is a good time to revisit budgets, especially for cafés, retailers, trades and service-based operators that have a high proportion of small card transactions. 5. Watch customer behaviour Businesses might find that the removal of surcharges encourages more customers to pay by card. Higher card usage is often positive for convenience and transaction speed, but keep an eye on total acceptance costs as patterns shift. The broader commercial picture This reform levels the playing field to some extent. Businesses that never applied surcharges will simply benefit from lower underlying fees. Those that did add a surcharge will enjoy simpler operations, less admin and fewer compliance risks. Over time, the changes should encourage more competition among payment providers, potentially leading to better products and lower fees across the market. There may be secondary adjustments (for example, banks reviewing rewards programs), but the combined effort of the RBA and ACCC aims to ensure that cost savings are passed through fairly and transparently. This is ultimately a practical reform Fewer add-ons at the checkout, simpler pricing for customers, and lower complexity for businesses. Some businesses will see this as an opportunity to improve margins, streamline processes and enhance the customer experience. We recommend reviewing your payment arrangements in the coming months. Our team can help analyse your current merchant fees, model the likely impact of the changes, and support negotiations with providers. For tailored advice on how the end of card surcharges affects your business, please reach out to Collins Hume on 02 6686 3000 — now is the ideal time to prepare.

Why your business value at 1 July 2027 could matter From 1 July 2027, the Government’s CGT reforms will change how certain capital gains are taxed, including changes to the 50% CGT discount. For business owners, this means the value of your business at 1 July 2027 could become important if you later sell, transfer or transition the business. Why act now? Trying to establish what a business was worth years after the event can be difficult. Financial information changes, circumstances are forgotten and supporting evidence can be lost. Our recommendation is simple: Start establishing your position before 1 July 2027, not after it. Strategy360’s Business Position Assessment documents: Your current business value drivers and risks How your business compares with industry benchmarks Opportunities to strengthen business value before 1 July 2027 Our assessment is not a formal business valuation. It provides a documented starting point and a stronger foundation for establishing the value of your business as at 1 July 2027. Starting early also gives you time to improve your business value and prepare for the possible CGT consequences of a future sale. Talk with Nathan McGrath, Strategy360 Senior Business Adviser and Specialist Business Valuer, about starting your Business Position Assessment.

Collins Hume | YOU. That’s all we focus on. You, your family, your wealth and the legacy you (and we) leave. That’s it. Join us on this amazing journey. STRATEGY360° Inspiring, Powerful, Meaningful Advice for Your Business Just as elite athletes rely on expert coaching teams to unlock their potential, businesses can achieve greater success with guidance from an experienced advisory firm. Our advisers provide strategic insights and practical solutions to help businesses overcome cash flow, risk management and succession challenges. Expert advice helps businesses navigate challenges, make informed decisions, and drive growth, profitability, and value. This partnership turns obstacles into opportunities, ensuring long-term success and competitiveness. As well as being award-winning accountants, Collins Hume are also highly sought-after Business Advisers who help business owners and business leaders implement plans and actions that add value to their businesses. Our holistic business solutions help business owners: Increase the financial returns they earn from their business Grow the valuation of their business, de-risk and reduce owner reliance, or prepare a business for sale or Tap into mentoring to provide direction, accountability and knowledge to assist in reaching their business goals. Does any of this ring true for you? Are you ready to improve your profit, boost cash flow and enhance your long-term business value? Contact Nathan McGrath on 02 6686 3000 for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements. Business valuation and cash flow support Cavvanba’s growth Aug 17 Byron Homemade Pizza: From Passion to Purpose Jul 8 How Marcon Consultancy Laid Strong Foundations for New Business Growth Aug 19, 2025 1 2 3 4 Our purpose is to inspire business owners to achieve success in powerful and meaningful ways. We simplify the complexities of business, partnering with you to focus on achieving meaningful and worthwhile outcomes, specifically: Improving cash flow and profit performance Increasing the value of your business Enhancing the lifestyle outcomes you experience from owning a business Harnessing your purpose and legacy. Strategy360 Resources Capital Gains Reform Now Law Will your business be ready for 1 July 2027? Business Valuation Services Know what your business is worth and what drives value. Budgeting & Forecasting Forecast with confidence. Budget with purpose. Grow with clarity. Business Benchmarking Gain clarity. Outperform the competition. Sharpen your focus. Business Improvement Program Unlock the full potential of your business. Business Planning Program Strengthen your business for the future. Cash & Profit Assessment Unlock cash flow. Boost profit. Grow stronger. Not-For-Profit Strategic Improvement Program Strengthen your impact. Future-proof your organisation. Risk & Value Driver Assessment Optimise your business for growth, resilience & higher market value. This is us Unlock the difference between industry average results and industry-leading benchmark businesses. Sounding Board Services Strategic support for business leaders. You, that’s all we focus on. You, your family, your wealth, your business and the legacy you (and we) leave. That’s it. You’ll access services designed to enhance growth, drive value creation, foster sustainable development, and navigate key transitions and challenges with us. Contact Nathan McGrath on 0435 400 202 for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements. Contact Nathan

Collins Hume | We have one focus — YOU —with us, you'll be looking way beyond the traditional horizons most accountants are restricted to. DISCLOSURE. As a Tax Agent, our work for you is performed in accordance with the Tax Agent Services Act 2009. Under this Act, the Tax Agent Services (Code of Professional Conduct) Determination 2024 requires that we make the following disclosures to you: 1. There are no current matters, or matters arising since 1 July 2022, that could significantly influence your decision to engage us (or continue to engage us) for a Tax Agent Service. 2. The Tax Practitioners Board (TPB) maintains a register of Tax Agents and BAS Agents. You can access and search this register here: https://www.tpb.gov.au/public-register 3. If you have a complaint about our Tax Agent services, you will need to contact your Accountant in the first instance with the details by email. If they are unable to resolve your complaint within 3 business days, please contact Collins Hume CEO Christopher Atkinson by email. Your complaint will be investigated by Christopher Atkinson / a staff member who is not involved in the subject matter of the dispute where possible. We will provide you with email acknowledgement of receipt of your complaint and our understanding of the circumstances. The email will inform you that we will attempt to resolve your complaint within 14 days and will outline the dispute resolution process. If you are unhappy with the outcome that we propose to you, you can then make a complaint to the Tax Practitioners Board (TPB) using the link listed above. The TPB will send you an email to acknowledge the receipt of your complaint and review and risk assess your complaint. If you are unhappy with how the TPB has dealt with your complaint, the above link includes details about your review rights and who can further assist you.

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