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 by advisers. This could result in the family trust distribution tax being triggered. It is important that advisers understand the concepts of ‘family group’ and ‘distributions’. ‘Family trust distribution tax’, if triggered, is a debt that is not subject to a review period and that the entity (which makes the distribution) together with the individuals who are directors or trustees can be jointly liable for.
In this session Linda will cover:
• When is an FTE or IEE required?
• What are ‘distributions’?
• Who is part of the ‘family group’?
• Who is liable to pay family trust distribution tax?
• When are distributions made outside of the family group?
• What should my trust deed say to help with these issues?
• How do you pass control of a trust that has made an FTE to the next generation?