Broad overview of the trust loss measures

Who is in a family group?

The concept of the family group is important as a family trust (or an entity which has made an interposed entity election in respect of the family trust) that makes a distribution of income or capital outside of the family group will be subject to family trust distributions tax.

A 'family group' includes:

• defined 'family' members of the test individual specified in the family trust election
• certain former 'family' members
• certain family owned or controlled companies, partnerships and trusts
• certain others, such as charities, that are exempt from income tax.

The defined 'family' members are as follows:

• the test individual's spouse
• a child, grandchild, parent, grandparent, brother, sister, nephew or niece of the test individual or of the test individual's spouse
• a spouse of such a child, parent, grandparent, brother, sister, nephew or niece
• any lineal descendant of a nephew, niece or child of the test individual or the test individual's spouse
• a spouse of any lineal descendant of a nephew, niece or child of the test individual or the test individual's spouse.

For the purposes of this definition, a child includes adopted, step and ex-nuptial children.

Refer to Section 272-95 of Schedule 2F to the ITAA 1936

Sections within Who is in a family group?

• Certain former family members
• Example 14: Family control test and family group