Super, Trust, or Company? The New “Wealth Equation”
For years, the default advice to Australian business owners was simple: max out super first.
And in many cases, it still makes sense — super remains one of the most tax-effective environments available.
But the landscape is shifting. With the Government’s proposed Division 296 measures targeting
balances above $3 million from 1 July 2026, the “super-first-for-every-dollar”
approach isn’t always the optimal next step for high-income owners and investors.
So the better question in 2026 is no longer “How do I cram more into super?” It’s:
Where should the next $500k–$1m actually live — super, a family trust, or a bucket company — so it grows efficiently without creating compliance landmines?
This guide breaks down how each structure works, when each one shines, and why the strongest wealth plans usually use a hybrid strategy — not a single winner.
The question is no longer “How do I max out my Super?”
It is: “Where do I put my next $1 million?”
Should it go into a Family Trust? A “Bucket” Company? Or are you better off paying the tax personally?
The answer lies not in choosing one, but in understanding how these three “silos” work together.
Quick Take (TL;DR)
- Super is often your first bucket for long-term wealth — but be mindful of the $3m threshold.
- Family Trust is the flexibility play: control + distribution planning + (often) asset protection benefits.
- Bucket Company can cap tax on overflow income when individuals are already in top brackets.
- Most robust plans use a hybrid structure, not a single “winner”.
Quick Comparison: Super vs Trust vs Company
| Factor | Super | Family Trust | Bucket Company |
|---|---|---|---|
| Primary advantage | Concessional environment for long-term investing | Flexibility + control + distribution options | Tax rate cap on retained profits |
| Access | Generally restricted until conditions of release | Generally accessible (subject to deed and trustee decisions) | Accessible via dividends/loans (rules apply) |
| Main watch-out | Balances above $3m (Division 296 proposals) | Deed rules, vesting date, documentation | Division 7A / UPE / loan compliance |
1. Superannuation: The “First $3 Million” Strategy
Within this bucket, earnings are generally taxed at a maximum of 15%
(and can be 0% in pension phase up to the Transfer Balance Cap).
(The general Transfer Balance Cap is $2.0 million from 1 July 2025.)
The “Business Owner” Exception
For SME owners, Super has a specific superpower that remains compelling:
holding your business premises.
If your Self-Managed Super Fund (SMSF) owns your commercial property, your business pays rent to your SMSF.
This can move cash from your business (often tax deductible) into your super environment, accelerating your retirement savings.
Read More: Learn more in our guide on
Purchasing Commercial Premises Using Your Superannuation
.
The Verdict: Fill this bucket first, but be wary of exceeding the $3m threshold unless you have a specific strategic reason.
2. The Family Trust: The “Flexibility” Strategy
Once your Super strategy is capped (or optimised), the Family Trust (Discretionary Trust) is often the next logical step.
Unlike Super, a Trust doesn’t lock your money away until you are 60. Unlike a Company, it doesn’t generally pay tax itself.
Instead, it can act as a “flow-through” vehicle, allowing you to distribute income to family members with lower marginal tax rates
(subject to the deed and compliance).
💡 The “Uni Student” Opportunity
Do you have adult children at university earning little to no income? A Trust may allow you to distribute investment income to them,
utilising their tax-free threshold (approx. $18,200) and lower tax brackets — potentially saving the family group significant tax compared
to earning that income personally at the top marginal rate.
Warning: The “Gift” Trap
Distributing money to adult children can be tax-effective, but what happens if you give them a lump sum for a house deposit?
Is it a gift (which might be lost in a divorce) or a loan? Proper documentation is critical.
Read More:
Family Loans vs Gifts: Why Proper Documentation Matters
.
Critical Compliance Check
If you have an older Trust, check your deed. Many trusts have a “Vesting Date” (often 80 years) where the trust must end.
Missing this date can trigger significant Capital Gains Tax (CGT) issues and other consequences.
Read More:
Beware the Trust Deed Vesting Date
.
3. The Private Company: The “Capped” Strategy
Commonly known as a “Bucket Company,” this structure is back on the radar for high-income family groups.
If your Super is optimised and your family members are already in top tax brackets, distributing Trust income to individuals can be inefficient.
Instead, you may distribute that income to a private company.
- ✔
The Benefit: The company pays tax at a flat corporate rate (commonly 30% for passive investment companies, or 25% for base rate entities where eligible). - ✔
The Strategy: You leave the wealth inside the company to compound over time, capped at the corporate rate — then plan how and when it’s extracted later.
However, moving money between a Trust and a Company is not “set and forget”.
It can trigger Division 7A loan / UPE issues if not handled correctly.
Read More:
Does Your Trust Need a Corporate Beneficiary?
Read More:
Division 7A Compliance 2025: Key Risks, Court Updates & ATO Focus
4. Important: Passive vs. Active
A crucial note for business owners: the structures discussed above are for wealth preservation (passive investing).
If you are structuring a trading business (active income), the considerations can be very different.
Read More:
Should You Trade Using a Company or Family Trust?
The Hybrid Approach
The “Super vs Trust vs Company” debate is usually a false choice. The most robust wealth plans use a Hybrid Strategy:
- 1. Super: Used for long-term concessional treatment, with careful planning around higher balances.
- 2. Family Trust: The central “hub” for investments, providing flexibility and distribution planning.
- 3. Bucket Company: Attached to the Trust to catch “overflow” income, capping the tax rate (with Division 7A compliance handled properly).
This structure can give you the best of all worlds: the long-term tax settings of Super, the flexibility of a Trust, and the tax cap of a Company.
FAQ
What is Division 296 and who will it affect?
Division 296 is proposed to reduce tax concessions for certain earnings attributable to super balances above $3 million from 1 July 2026.
Whether and how it affects you depends on your balance, your structure, and how the final legislation is implemented.
What is a bucket company?
A bucket company is a private company used as a corporate beneficiary of a discretionary trust, often to cap tax on retained income at the corporate rate when distributing to individuals would be taxed at higher marginal rates.
Ready to discuss your wealth structure?
Is your current wealth structure optimised for the current tax rules? Book a confidential discussion to review your Super and Trust strategies.
NEED HELP? This article provides general information and should not be considered legal or tax advice.
For personalised guidance, please contact our expert team of tax accountants at The Quinn Group by calling 1300 QUINNS (1300 784 667)
or +61 2 9223 9166, or submit an online enquiry form to arrange an appointment.
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