Family Trust Elections and Interposed Entity Elections

Published on 01 Oct 04 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

Family Trust Elections (FTEs) and Interposed Entity Elections (IEEs) emerged from the trust loss rules announced in the 1995 Federal Budget, and as they originally only applied to trust losses, very few trusts were affected and hence few FTEs and IEEs were made and lodged with the Australian Taxation Office (ATO). Recently, renewed interest in what was thought to be largely settled law caused professional bodies including the Taxation Institute of Australia and the Institute of Chartered Accountants in Australia to petition the Government to express their members' concerns relating to these complex provisions of the Act.

In response, the ATO issued Practice Statement PS LA 2004/1 (GA) on 15 April 2004, which applies to trusts which have elected to be family trusts for the purposes of the trust loss measures, company loss measures or the franking credit trading measures.

In light of these developments, it is both timely and important to revisit FTEs and IEEs and critically examine whether the ATO's Practice Statement represents an adequate response to the stated concerns. The Article seeks to undertake this examination and is structured in a practical question-and-answer format that will examine not only the theoretical issues but also, and more importantly, it will focus on the practical issues.

Author profile

Prof Dale Pinto CTA-Life

Dale is currently Professor of Taxation Law in the Curtin Law School as well as being the Chair of the Academic Board at Curtin University. Dale is the author and co-author of numerous books, refereed articles and national and international conference papers and sits on the editorial board of a number of peer-reviewed journals as well as being the Editor-in-Chief of several refereed journals. He is a member of the Board of CPA Australia and is also a Fellow of the Australian Academy of Law as well as being a Chartered Accountant, Chartered Tax Adviser and Honorary Life Member of the Tax Institute. He is also a Life Member of the Australasian Tax Teachers Association and the Australasian Law Teachers Association. Dale has been a registered tax agent for more than 25 years and was appointed by the Assistant Treasurer as one of the inaugural members of the National Tax Practitioners Board. He is a current member of the Board of Taxation’s Special Advisory Panel and the ATO’s Tax Technical Panel as well as the Chamber of Commerce and Industry’s Economic Development Forum in WA. Dale is a member of the Tertiary Education and Quality Standards Agency (TEQSA) Expert Panel in Accounting, Taxation and International Education. - Current at 13 August 2019

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