We’ve helped countless families across Inner West Sydney navigate the complex world of Family Trust Elections (FTEs) — and we’ve seen too many stumble into the same avoidable traps. The culprit? Misunderstood rules and missed details that lead straight to the dreaded Family Trust Distribution Tax (FTDT).
Think this is just harmless paperwork? Think again. One overlooked update, one misaligned election, one misstep — and suddenly, you’re staring down thousands in penalties and risking the very legacy you’re trying to protect.
What’s Going Wrong?
The ATO has raised the red flag: more businesses are triggering FTDT unintentionally due to:
- Poor record-keeping 📂
- Outdated or unclear family trust elections
- Lack of succession planning when key people pass away
- Complications from blended families or second marriages
- Distributions to companies that appear related, but aren’t officially part of the family group
Why It Matters — For Real
Distribute income to a company owned by your spouse’s trust — or even another trust you control — and you could unknowingly trigger a 47% tax if FTEs aren’t aligned.
Let the specified individual on your FTE pass away without making updates? Your trust may become stranded, unable to distribute safely to other family members.
Even smart tools like interposed entity elections or nominating a new specified individual can fall short. These options come with strict deadlines, and one delay could mean exposure to penalties.
A Real-Life Case: The $37,600 Mistake
A couple in Marrickville ran two businesses under separate family trusts. They believed they had everything in order — each trust had its own FTE. But when they began sharing profits between the businesses to minimise tax, they didn’t realise the trusts weren’t considered “related” under ATO rules.
By the time they reached out to us, $80,000 had already changed hands between the trusts, triggering a massive FTDT bill of $37,600. 💸
This disaster could’ve been avoided with aligned elections and proper structuring from the start.
What You Can Do Now
🔍 Audit your trust setup — especially after major life events like marriage, divorce, or the death of a key person.
🧩 Coordinate FTEs — make sure every trust and company is aligned.
👨👩👧👦 Keep distributions within the defined family group — don’t assume related means compliant.
📞 Work with a local expert — get advice that goes beyond the basics and shields your family from future risk.
EndureGo Tax: Your Local Family Trust Experts
We don’t just lodge tax returns — we help you build a legacy. Our team ensures your trusts are compliant, coordinated, and structured with long-term protection in mind.
✅ 20+ years serving Inner West Sydney
✅ Custom strategies for families and small businesses
✅ Straight talk, smart planning — no fluff, no jargon
Book Your Free Strategy Session Today
Hope isn’t a strategy. Let’s bulletproof your family trust today — before the ATO comes knocking.
👉 Call EndureGo Tax — your trusted local accountant — and take control of your FTEs with confidence.
