Family trust elections

Review your family trust elections to get your tax right

A family trust for tax purposes is one whose trustee has made a valid family trust election (FTE).

The FTE entitles the trust to access certain concessions, however family trust distribution tax (FTDT) is imposed when distributions are made outside the family group.

The ATO’s recent client engagement activities have highlighted instances where FTDT liabilities could have been avoided if FTE and interposed entity election (IEE) details had been regularly reviewed.

Where these elections are in force, trustees and their registered tax agents should consider the following (at least annually):

  • Do you still need the election, or should it be revoked?
  • Is the specified individual still the most suitable person or should this person be varied?
  • Are you within time to vary and/or revoke your elections?

It’s important to recognise the members of the specified individual’s family group when making annual trustee resolutions as distributions outside of this group will result in FTDT.

Omnis Group are modern, forward-thinking Business Accountants in Perth, providing practical, proactive, real-world advice and support that goes beyond the basic preparation and lodgement of tax returns, to identify opportunities for improvement in your business. Contact us in Subiaco Perth on 08 9380 3555.

Source: ATO