As previously reported in June this year, the Australian Taxation Office (ATO) published the Draft Taxation Determination TD 2017/D1 altering their previous published interpretation of the meaning of “distributes” for the purposes of the family trust distribution tax (FTDT).

The draft tax determination has now been published in its final form as TD 2017/20, confirming that FTDT can apply where there is a “distribution” to a person who is not a beneficiary of the trust.

The ATO view is aligned with section 272-60 of Schedule 2F to the Income Tax Assessment Act 1936, which extends the meaning of “distribution” to a range of transactions such as a forgiveness of debt or allowing the use of trust property. As a result, trustees of family trusts who confer a benefit on a person who is not a beneficiary of the trust will be liable to pay FTDT.

For more information regarding the content of this tax determination, please read our previous article.

To discuss further please contact: 

Daniel Smedley
Principal | Accredited Specialist in Tax Law
Sladen Legal
M +61 411 319 327 |  T +61 3 9611 0105
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia  
dsmedley@sladen.com.au

Patricia Martins
Legal Project Manager
Sladen Legal
T +61 3 9611 0138
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia  
pmartins@sladen.com.au