Making and revoking FTEs and IEEs
Published Date: 17 Aug 2026
Making a family trust election (FTE) gives a trust access to the “excepted trust” concessions under the trust loss rules. An FTE can also enable a beneficiary of a discretionary trust to be a “qualified person” to claim franking credits on franked distributions flowing through the trust, provided the other requirements of the imputation rules are satisfied. A trade-off when making an FTE is that distributions outside the specified individual’s family group are subject to family trust distribution tax (FTDT). An interposed entity election (IEE) brings a company, partnership or trust into that family group, but also exposes the electing entity’s distributions to FTDT if made outside the family group. This article explains the requirements for making valid FTEs and IEEs under Sch 2F to the Income Tax Assessment Act 1936 (Cth), including the selection of the specified individual, approved-form requirements, retrospective commencement and the family control test.
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- Published By: Scott Luetjens, Alex Yuen
- Published On:17 Aug 2026
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