Issues arising from historic Family Trust Election (FTE) and Interposed Entity Election (IEE) decisions are becoming increasingly visible across the profession and in public commentary. Changing family dynamics and gaps in records are often at the centre of these challenges.
The key risk is the inadvertent triggering of a Family Trust Distribution Tax (FTDT) liability. In most situations, this arises even where there is no tax mischief.
To manage this growing exposure for clients, and to reduce practitioner risk, it is important to revisit how these rules operate and understand why FTEs and IEEs were made in the first place.
What this session will cover
- A concise refresher on Schedule 2F, including its purpose, trust categories within private groups and the relevant loss tests.
- The decision-making pathway that leads clients to make FTEs and IEEs.
- Common issues that arise when historic FTE and IEE decisions no longer align with current family dynamics, or when problematic structures are inherited during client onboarding.
- Practical examples of problematic scenarios, how to avoid them, and how to anticipate and mitigate issues before they escalate.
- How to identify opportunities to capture value and position yourself as a strategic advisor, whether resolving legacy problems or strengthening client structures for the future.
