EXCLUSIVE | Grieving family hit by Anthony Albanese’s new death tax

We are about to get a real -life example of the impact that the Prime Minister's changes are going to have to discretionary trusts.In last week's Budget, the Government proposed a minimum 30 % tax on discretionary trusts.Rod Mitchell has reached out saying my teenage niece Jacinta and nephew Jason recently lost their father.John left them a modest inheritance in a discretionary trust for when they reach adulthood.It now appears that these new tax measures will substantially erode that inheritance.Rather than allowing the funds to grow and provide some stability, the increased tax burden will diminish the support their father intended for them.

And Rod says this is particularly concerning given the challenging circumstances that they're facing.We're about to learn more.Rod Mitchell is in our studio.

Thank you so much, Ben.

I appreciate you being here.This is all very recent that John passed away.It was only in April that he passed away.Yes, in April 24 he passed away from a bone marrow cancer, a rare disease.It was very tragic.And this is your brother -in -law?

Brother -in -law, yep.Okay, so he leaves behind Jacinta, who's 16, and Jason, who's 19.Yes.Dare I ask, how are they doing?How are they holding up?

Yeah, look, they've lost their father.It's very difficult for them.They're just two kids with a single mum.They've got good community support.They've They've been supported well by the community, but it's, you know, it's not easy, not easy.

The money has been left in a discretionary trust and under the changes, those funds will now be subject to a minimum 30 % tax.

That's what I've been advised by my accountant.I spoke to the accountant yesterday just to check because it's all sort of a bit fluid for me and for my wife.And he advised, yes, the kids that any, any earnings from the discretionary trust 30 % will be taken from the kids straight to the government, and he just said they're going to be clearly disadvantaged and worse off under this situation.

What right do they have to take this money that's been left behind for them from their father?

I think they have no right.These changes, in my mind, they're unfair.They're just being dumped on us.They've put my wife and I under more pressure because we're trying to manage the investment for the kids to do best for them.What's best for them?Because their father intentionally, he made a specific request just before he died that this money be left for the children to help them get ahead in life.

And they're so young, 16 and 19, left without a dad.They've got a single mum, and they thought that there was this inheritance.Not that that is their focus, but good on you for going into bat for them.You've had some conversations, as you say, with an accountant.Yes.So he says if the trust grows at 5%, currently the children would receive the total $25 ,000 with no tax.

Under the changes, the $25 ,000 will be taxed at a flat rate of 30%, so they'd lose about $7 ,500.That's what he said, yeah, the $7 ,500.

They lose, just gone.They lose that, they can't use that to help them get ahead in life, which is the goal of the trust, to help them get ahead in life without a father.They've got no father.They've lost their father's income, in a sense.There's no father's income to help them get on in life now.They're just two kids with a single mum.

One income.

This is not a bucket load of money that's being left behind for them, right?No.For anyone listening, if you're thinking, oh, these are these rich kids and they've got millions of dollars being left behind in a trust.No, this is a little bit of money left behind from their dad.

Yep.

Yep.Yep.Jacinda and Jason have already got other challenges in their lives as well.I don't want to go too much into that.You might be able to give me some sense of the fact that these guys have not had an easy road.That's very true.

Yes.

So one of the children had a, uh, an epileptic seizure at birth, which resulted in brain damage.And so he had, he requires additional support and, and life needs.

I can hear how broken you are.

Yeah, no, no, it's, it's, it's a really unfortunate situation.

And the accountant can't offer any other advice.He just says, well, sorry, I don't make the rules.Jim Chalmers and Anthony Albanese do.Well, that's true.

We could talk what he said.I mean, one little note he did add, which again, just complicates it.He just made the point with just the salty icing on the cake that he said, I'm sorry, but because these laws are now new laws, it makes it more complicated managing the trust.It's going to require more time from me, which means more costs for you.So the cost takes more money out of the trust because of these new laws.They're harder to manage and administer, which again is just one of these indirect effects from these unmandated laws.

Very unfair, very cruel.

What would John be making of all of this?

He'd be horrified.He was a really caring, loving, besotted father for his kids.It's cruel.The whole family, it's just cruel.Cruel.

I've got messages coming through already.Mary says, thieving mongrels.Another one here, legalized theft.This is reprehensible.And they're all right.Yeah.

Yeah.

It's, it's immoral, Ben.Immoral.

I think, you know, again, they've just been dumped on us, dumped on, you know, a single mom with two kids.It's just, it's unfair, immoral, and it puts pressure on us, on them.Yeah.

The opposition leader, Angus Taylor, has labeled the changes a death tax by stealth.

Yeah.

Hard to argue with that.Yeah.I agree.

Yeah.

Because you've just had a death.Yes.In April.Yeah.

Yeah.Yeah.Yeah.And the money's there for the kids.Yeah.They talk about intergenerational There's no equality here, mate.

No equality.It's theft, I think.They're taking the hard -earned money from their parents, grandparents, and just stealing it from these young kids.

He's already paid tax on that money as well, John.Absolutely.He's paid tax on that money, so the government's already got a good slice out of him.He's not here anymore.He's leaving some of it behind for his own children, so that they have got a betterof getting by without him.

And they think it's okay to still dip their hands into the pockets of a dead man and take his money that's destined for his own children.I would be as furious and as upset as you are.

Yeah, thank you.As I said, it's cruel and unfair.

I've got another note here.This poor man, you can hear how hard it is for him.He's trying to help his family and the government's making it impossible.In closing Rod, what would you like to say to the Prime Minister and to the Treasurer?

I think this is an unfair tax.It's cruel.It hasn't been well considered.I think that they should take it to the people, it should be discussed, and they should have the courage to say they've lied by changing their position, and who their position is, I don't know.But it's unfair that it's unmandated, and it should be discussed, it's ill -considered.

I think that Anthony Albanese and Jim Chalmers should contact Jacinta and Jason and try to explain to them why this is happening and why this money that was left for them by their father is being taken from them.Jacinta's only 16, Jason's only 19 and we'll stay on this case and I really appreciate you coming in the studio to tell us about it this morning.Thank you Ben, I'm very grateful.Rod Mitchell, so PM, Treasurer, what do you say to these two?16 and 19, their father's dead, They've got a single mum, they're not millionaires and you're taking more of the money that was supposed to be left to them by their deceased father.How could you?