2024

Family Trust Elections

Published Date: 11 Apr 2024

 

The rules about family trust elections, in particular who is part of the ‘family group’ and what are ‘distributions’, are quite complex and commonly misunderstood. This is because ‘distributions’ outside of the ‘family group’ could result in the family trust distribution tax being triggered. Family trust distribution tax, if triggered, is a debt that is not subject to a review period and for which the entity (which makes the distribution), together with the individuals who are directors or trustees, can be jointly liable. Therefore, it is important that advisers understand the concepts of ‘family group’ and ‘distributions’.

This session covers:

  • What are the implications of making a FTE or IEE
  • When is a FTE or IEE required
  • Requirement to make a valid FTE or IEE (including issues for testamentary trusts in meeting the ‘family control’ test)
  • What are ‘distributions’
  • Which individuals and entities are part of the ‘family group’
  • Who is liable for FTDT
  • What should the trust deed say to help with these issues; and
  • Passing control of trusts to the next generation.

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