From hlb.com.au: Family Trust Elections are critical for ensuring income, losses, and tax benefits remain within a designated family group, helping to prevent tax minimization abuses.

The ATO has intensified its scrutiny of family trusts, focusing on compliance with FTE rules, including valid documentation and avoiding distributions outside the defined family group.

Making an FTE can carry significant long-term implications, and trustees must maintain accurate records and ensure timely elections to avoid heavy penalties.