The Assistant Treasurer has released extremely important Exposure Draft legislation on 13 April which will shape how tax practitioners advise their clients about Trust distributions for the 2010/2011 income year. These measures will seriously impact on family trusts and managed investments trust decision making in just over 2 months time. The new laws will allow flow through of franking credits and capital gains but in an unexpected fashion. At first the proposed methodology appears foreign to advisers used to the Division 6 approach but on a closer consideration Treasury may have it right. Will they work in all instances to ensure that targeted beneficiaries benefit? Aspects of the draft legislation may require further thought. This video explains the theory which supports the draft legislation and works through practical problems which will face practitioners.