Page 9 - Wealth-Adviser-Issue-124 (FWP)

ISSUE 124
NOVEMBER 2025

over franking credit refundability, taxed company profits, set up trusts only where their benefits are clear and suited to
and pension phase income is not merely academic—it genuine needs.”
reflects genuine tension in public policy and family expecta-
tions. Conclusion
One frequently cited point is that “1.7 million trust In 2025, the family trust remains a powerful but demand-
beneficiaries” vastly outweigh the roughly 80,000 superan- ing structure for tax planning, succession management,
nuation beneficiaries originally targeted by recent govern- and asset protection. Recent commentary urges Australian
ment tax reforms. Major changes to trust taxation would families to weigh compliance costs and legal uncertainty
therefore have not just technical impacts but also far-reach- against enduring value—recognising that trusts are optimally
ing electoral consequences. As highlighted by experienced deployed in well-considered, diligently managed scenarios.
practitioners, “Australians don’t need dodgy schemes in As tax rules shift and policy debates intensify, those who
Caribbean islands to hide their wealth. There are plenty of succeed will be the ones who proactively steward their
legal ways to avoid paying tax but they will leave personal trusts in close consultation with qualified advisers, ensuring
income tax carrying a heavy burden for future generations.” every stage aligns with family, legal, and societal goals.
Debates about whether refunds of franking credits for
low-income pensioners constitute a fair system or a “symbol
of self-entitlement” swirl alongside arguments that “invest- References
ment income and interest on savings should not be taxed • “Family trusts: Are they still worth it?”
more harshly than employment income.” As one commen- Peter Bardos, HLB Mann Judd, FirstLinks, 29 October 2025
tator aptly writes, “For this person whether they were paid • “Family Trust Distributions Under ATO Scrutiny: What You Need to
the grossed up dividend up front or claim the imputed credit Know”
back is immaterial,” reflecting both technical and moral KPG Taxation Blog, October 2025
ambiguity in policy design. • “As compliance costs rise, are family trusts still worth the bother?”
Amid these arguments, the enduring principle emerges: Accounting Times, 9 September 2025
trusts can serve a valuable societal and family role, but only • Additional external references:
if their governance keeps pace with legal and economic • Australian Tax Office, “Family trusts,” official guidance, 27 August 2025
change. The collective advice across the three examined ar- • Jon Ralph, “Review into Business Taxation,” Australian Treasury, 1999
ticles converges on caution: families and their advisers must • Hudson Financial Planning, “The Complete Guide to Testamentary
“regularly review trusts’ structures, ensure compliance, and Trusts in 2025,” 11 June 2025
• Grant Thornton, “Court rules ATO’s 15-year stand on trusts and Division
7A to be wrong—Bendel Case,” 5 March 2025

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