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Family trusts may seek $1b in tax refunds after landmark decision

Michelle Bowes

Family trusts incorrectly penalised by the Australian Tax Office for allegedly breaching anti-avoidance laws should act now to lodge objections after a landmark court victory, experts say.

The Federal Court has affirmed that certain payments owed by a trust to a corporate beneficiary should not be treated as loans for the purposes of Division 7A of the Tax Act, contrary to the ATO’s long-held view.

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Michelle Bowes writes about wealth from our Sydney newsroom. She has more than 20 years of experience as a business journalist and is the author of Money Queens: Rule your Money, an award-winning personal finance book for teenage girls. Email Michelle at michelle.bowes@afr.com

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    Original URL: https://www.afr.com/wealth/tax/family-trusts-may-seek-1b-in-tax-refunds-after-landmark-decision-20250220-p5ldo8