ATO reminder about family trust elections
Liz Gibbs • December 11, 2024

ATO reminder about family trust elections

Taxpayers may be considering whether they should make a family trust election ('FTE') for a trust, or an interposed entity election ('IEE') for a trust or other entity. 


Making an FTE provides access to certain tax concessions (assuming the relevant tests and conditions are satisfied), although there are important things to consider.


In particular, once the election is in effect, family trust distribution tax ('FTDT') is imposed when distributions are made outside the family group of the 'specified individual'. FTDT is a 47% tax, payable by a trustee, director, or partner, as the case may be (depending on the entity).


Taxpayers should review FTEs and IEEs annually to ensure they remain appropriate. Taxpayers can only revoke or vary FTEs and IEEs in limited circumstances and subject to certain conditions.


Before making a distribution or annual trust resolutions, trustees should identify the members of the specified individual's family group. This will help avoid FTDT liabilities.


Please contact our office if you require any assistance in this regard.


Need Help with your Business, Bookkeeping, Tax or SMSF requirements?

If you would like a little help, please get in touch with us for assistance. We can help with your business, bookkeeping, tax and SMSF requirements.


Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.



owners salaries
By Liz Gibbs December 5, 2025
I’ve met with several business owners who haven’t paid themselves properly in months. If that’s you, this week’s tip is a must-read.
newsletter
By Liz Gibbs December 2, 2025
Welcome to our December 2025 newsletter—packed with key tax deadlines, updates, and tips to help you stay compliant and informed.
By Liz Gibbs November 28, 2025
Why Strong Sales Don’t Always Mean Strong Cash Flow
More Posts