Family trusts aren’t off the hook just yet

Attempts by the ATO to tighten the rules on family trusts have been thrown out of court, but speculation remains the government is planning to take a fresh look at the issue

Will federal Treasurer Jim Chalmers and the government have another go at trusts after the next election? Picture: Martin Ollman

The legal structure around family trusts in Australia has just survived a double stress test in the courts where the ATO tried to make changes in the personal use of some assets. The case has now been turned away for a second time on appeal and for now the coast is clear.

After the recent Administrative Appeals Tribunal threw out the ATO’s appeal surrounding a case claiming unpaid trust entitlements were loans, almost a million Australian family trusts now have clarity about the current law.

Of course, laws can be changed and there is already speculation the government will return to the issue after the next election.

In this latest podcast we examine: Is a family trust worth exploring? And can we assume the legal structure widely used by business owners, farmers and wealthy investors is now secure?

Who is the guest?

Will Hamilton of Hamilton Wealth Partners

Why him?

Hamilton is a specialist adviser with extensive dealings in family trusts

What are the topics?

• Family Trusts – what you need to know

• Capital gains tax and super

• Risk taking in your own name

• Are private credit offerings as good as they seem?

Question of the week:

Regular listener Jeremy asked: “On the issue of whether deposit bonds are worth using,

I have had experience using both and during Covid lockdown I used a deposit bond. Compared to using my own bank for a margin loan which involves inordinate bureaucracy and grovelling detail, the deposit bond was a breeze and cost-wise was very competitive.

I rang up one of the two major suppliers of these bonds and after checking my credit score, (which is excellent) they just said ‘yep’.

I asked what would happen if I reneged on the purchase. He said ‘that’s easy, we’ll just

pay the deposit and sue the pants off you’. Deposit bonds may not be for everyone but it was definitely a good experience for me.”

Questions always welcome to the podcast, via [e-mail]