Family Trust Distribution Tax
Source: Western Australia
Published Date: 12 Mar 2026
The heightened focus of the ATO on discretionary trusts and family trust elections (FTEs) is leading to unintended outcomes, with an increasing number of taxpayers facing significant tax liabilities for family trust distributions tax (FTDT) in circumstances where ‘distributions’ have been made outside of the ‘family group’. Complex legislation, combined with the challenges that can arise from deficiencies in record keeping, no statutory amendment period and no legislative discretion for the Commissioner to disregard a distribution for FTDT purposes has led to a ‘perfect storm’, potentially wiping out family wealth and putting tax agents at risk. This session explores the potential adverse tax implications of making a distribution outside of the ‘family group’ and provide practical strategies for advisors in understanding and managing FTEs.
This session covers:
- Making valid FTEs and record keeping considerations;
- The broader meaning of ‘distribution’ in the context of FTDT;
- The original intent and purpose of the trust loss rules and whether the Commissioner can provide relief under his general administrative powers.
- Key takeaways from recent case law concerning FTEs and FTDT; and
- The recent ATO focus on the 45-day holding period rule specifically in the context of newly incorporated beneficiaries; are franking credits at risk.
Individual Session
Details
- Published By: Tracey Dunn
- Published On:12 Mar 2026
- Event Name:WA Tax Forum
- Session Name:Family Trust Distribution Tax
- Listen Time:1+ hour
- Took place at:Pan Pacific Perth
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