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Velocity Legal

Level 43, 80 Collins Street, North Tower, Melbourne VIC 3000

Level 10, 580 George Street, Sydney NSW 2000

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Tax
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Family Trust Distribution Tax

Family Trust Distribution Tax

Family trust distribution tax issues often arise where trust distributions do not align with Family Trust Election rules or beneficiary entitlements. Understanding how these rules apply can help manage tax exposure and reduce the risk of unexpected liabilities.

We help:

  • Understand how Family Trust Elections affect trust distributions and tax outcomes
  • Identify tax risks arising from trust distributions and beneficiary arrangements
  • Address distribution tax issues in a clear and informed way
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4.9
74 Google Reviews
Award Winning Law Firm – Top Specialist Firm & Top Boutique Firm (Australasian Lawyer)

First class advice, service, and communication. I have had the pleasure of working with Velocity Legal for many years across a range of challenging matters and they never fail to impress.

Grant F

Their meticulous attention to detail, unwavering professionalism and strategic approach have delivered an outstanding result. Their level of service is nothing short of impressive.

Jack C

From the initial consultation to the final resolution, they provided exceptional
service and achieved an outstanding result for our case.

Wan Li

We are an accounting firm that works closely with Velocity Legal on all our client's legal matters… Every client who works with their team is delighted and impressed by the clear advice, efficient communication, and seamless process.

Selina L

I highly recommend the team at Velocity Legal. They are extremely knowledgeable, professional, have an eye for detail and their work ethic is second to none.

Mark P

They provided so much support and guidance through the process and I felt like they genuinely cared about getting the right outcome for me. They obviously know their stuff but were able to explain things in a simple and clear way.

Natalie F

Approachable, honest, professional and transparent. An absolute pleasure to work with.

Bob W

4.9
74 Google Reviews
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We Understand What You Are Going Through

Family trust distributions are often made as part of routine annual administration, particularly where trusts are used for business or investment purposes. In many cases, arrangements may have been in place for years without issue.

You may now be concerned about whether past or current distributions comply with Family Trust Election rules, beneficiary definitions, or ATO guidance. Increased scrutiny around trust distributions has made these issues more visible and, for some, unexpectedly serious.

We understand how unsettling these matters can feel. We help trustees and beneficiaries work through family trust distribution tax issues in a structured and practical way, so risks are identified, addressed, and managed appropriately.

Our Services Include

  • Advising on the operation and implications of Family Trust Elections
  • Reviewing trust distribution practices for compliance with distribution tax rules
  • Advising on tax risks arising from distributions to beneficiaries or related parties
  • Supporting responses to ATO reviews, audits, and disclosure programs
  • Advising on section 100A and reimbursement agreement risks
  • Assisting with rectification strategies for historic trust distribution issues
Our Difference
Accountability & Expertise

Every matter we handle comes with full accountability. You’ll deal directly with an expert – every time, no exceptions.

In Your Shoes

Understanding your unique circumstances and goals - so our advice is practical, personal, and never given in a vacuum.

Transparency & Communication

We speak your language. That means plain, clear advice - what’s happening, why it matters, and what comes next.

50+
Australian Based Team
4,000+
Matters Expertly Handled
10+
Awards & Industry Recognition

Our Process

  1. Book Meeting
    Fill in contact form below or call our office to book an initial consult. You can choose between in-person or video conference.
  2. Get Advice

    You’ll discuss your situation in depth with a senior lawyer. This includes exploring your requirements, goals, and desired outcomes. You’ll walk away from this meeting with a clear understanding of the next steps.
  3. Achieve Outcomes

    Our legal team will work tirelessly to achieve your desired objectives. We work hard, communicate regularly, and pride ourselves on delivering results.
Contact
Take the First Step Today

You don’t have to figure this out alone. Book an initial consult with our expert legal team and get clear answers about your situation.

  • Transparent quotes (no ‘bill shock’)
  • Rapid response
  • Award winning team
Andrew Henshaw
Managing Director
Award Winning Law Firm – Top Specialist Firm & Top Boutique Firm (Australasian Lawyer)
Our Directors

Managing Director

Andrew Henshaw

Director

Demian Walton

Director

Greg Thomas

Director

Jennifer Maher

Director

Jess Hill

Director

Rajan Verma

Director

Seamus Ryan

Director

Shannon Hilton

Frequently Asked Questions
What is a Family Trust Election?
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A Family Trust Election is a formal election made for tax purposes that restricts who can receive trust distributions without triggering additional tax. It is designed to prevent income streaming outside a defined family group.
What happens if trust distributions breach Family Trust Election rules?
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Distributions outside the permitted family group can trigger Family Trust Distribution Tax, which is imposed at the top marginal tax rate. This can result in significant and unexpected tax liabilities.
Can the ATO review past trust distributions?
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Yes. The ATO may review historic trust distributions, particularly where arrangements do not reflect genuine outcomes or where reimbursement agreement concerns arise.
How does section 100A affect trust distributions?
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Section 100A addresses reimbursement arrangements, where trust income is distributed on paper but benefits another party. If it applies, the trustee may be taxed at the top marginal rate.
Is it possible to correct or manage past trust distribution issues?
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In some circumstances, options may be available to address or mitigate historic issues. The appropriate approach depends on the nature of the distributions, timing, and engagement with the ATO.

Take the First
Step Today

You don’t have to figure this out alone. Book an initial consult with our expert legal team and get clear answers about your situation.

  • Transparent quotes (no ‘bill shock’)
  • Rapid response
  • Award winning team
Book Consult
4.9
74 Google Reviews
Award Winning Law Firm – Top Specialist Firm & Top Boutique Firm (Australasian Lawyer)