The Australian Taxation Office has extended its offer to remit up to 80% of general interest charges on family trust distribution tax liabilities until 30 June 2027. The extension gives trustees, electing entities and tax agents more time to review family trust elections, disclose outstanding liabilities and seek relief.
The Australian Taxation Office (ATO) announced on 19 October 2026 that it has extended its offer to remit general interest charge (GIC) on family trust distribution tax (FTDT) liabilities. The offer now runs until 30 June 2027, six months longer than planned.
How the remission works
The offer started in August 2025. Trustees, electing entities and tax agents who review their family trust elections on their own initiative, notify the ATO of any FTDT liability and may receive remission of up to 80% of the GIC. The ATO considers each case and grants remission where it is fair and reasonable. Many taxpayers have already taken up the offer.
The ATO extended the window after feedback that checking elections and identifying FTDT liabilities takes considerable time.
Reviewing family trust elections
Family trust elections (FTEs) and interposed entity elections (IEEs) should be reviewed to decide whether they are still needed. Once made, an election can only be varied or revoked in limited circumstances.
An FTE may be varied once. Generally, the new specified individual must belong to the original specified individual’s family group, and no present entitlements or distributions of income or capital may have gone outside that new family group.
An FTE may be revoked if the trust is a fixed trust, or if the election was not needed to recoup tax losses, deduct bad debts or access franking credits, subject to certain conditions. Variations and revocations may be made until the end of the fourth income year after the year specified in the original election. They must be lodged with the tax return for the income year in which they take effect.
Knowing the family group and keeping records
The family group has a strict legal definition. Trustees must know every individual and entity in it, including corporate beneficiaries. This matters most when year-end distribution decisions are made. A distribution outside the family group attracts FTDT at 47%, payable by the trustee, director or partner.
Records must be kept for at least five years after the final lodgment obligations. This includes written records of the original FTE and IEE. The specified income year from each election must appear on the tax return for every year the election remains in force.
Tax agents can use the Online service for agents report titled “Family trust and interposed entity elections report.” From 18 April 2026, the report includes more detail on all lodged elections, including the date each was lodged. The ATO displays elections as they are lodged and does not form any opinion on their validity.
The ATO directs taxpayers and agents to its family trusts information page for ongoing guidance and a webinar on family trust rules. Deputy Commissioner Louise Clarke presents a short video summarising the key tips.
