×

Are your clients’ franking credits at risk?

Woman With Family Sitting On Sofa In Background At Home

Have you closely considered whether your testamentary trust client requires a Family Trust Election (FTE)?

On 14 December 2013, the Government announced that it would not proceed with long-proposed amendments to relax the application of the “45 day holding rule” for beneficiaries of testamentary trusts. Therefore, an FTE will almost certainly be required if an income beneficiary of a testamentary trust wishes to claim an amount of franking credits exceeding the “small investor limit” ($5,000).


It is critical to remember that the $5,000 small investor limit takes into consideration franking credits from all sources – not just those forming part of the income distributed from the testamentary trust. Therefore, you should closely monitor income beneficiaries who derive franked dividends from multiple sources.

If you are considering putting an FTE in place for a testamentary trust, it is imperative to determine the most appropriate test individual . This selection is critical as it will determine the context of the family control test as well as which family members will be covered by the FTE.

For assistance in determining whether your client requires an FTE please speak to us on (07) 3223 6100.

Back to Articles
Redchip

Recent Articles

Myriad2018-FB-ShareImg_932
Mingling at Myriad 2018

Our commercial team shares some game-changing takeouts from the second annual Myriad festival.

Read more
young-male-hiding-head-in-sand-picture-id519012383
Data privacy and protection just got serious

If you’re not aware of the European Union’s General Data Protection Regulation (GDPR) that came into effect on May 25, you must have had your head in the sand for the past few months.

Read more
young-man-making-a-promise-picture-id661885844
A Chief Trust Officer – are you kidding?

During a chat with a very young (and obviously talented) AI developer, it dawned on me that the millennials we are doing business with place a very different meaning on trust and integrity.

Read more