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When to use the Family trust election, revocation or variation 2023
Trustees must use the Family trust election, revocation or variation 2023 for:
- making a family trust election in accordance with section 272-80 of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936) specifying the 2004–05 or later year
- revoking a family trust election in 2022–23 in accordance with subsections 272-80(6) to (8) of Schedule 2F to the ITAA 1936, or
- varying the specified individual under subsections 272-80(5) to (5D) and (8) of Schedule 2F to the ITAA 1936.
If you want to revoke or vary a family trust election, use the Family trust election, revocation or variation 2023 only for 2022–23.
Conditions for making a family trust election
Find out what the conditions are for making a family trust election:
Where specifying the 2022–23 year
To make a family trust election for 2022–23, the trust must pass the family control test in section 272-87 of Schedule 2F to the ITAA 1936, at the end of that year; see subsection 272-80(4) of Schedule 2F to the ITAA 1936. However, the election will only be in force from the earliest time (the election commencement time) in 2022–23 from which the trust passes the family control test, continuously until the end of that year; see subsection 272-80(10) of Schedule 2F to the ITAA 1936.
A trust can only have one family trust election in force; see subsection 272-80(11) of Schedule 2F to the ITAA 1936. However, trustees can make a family trust election and one or more interposed entity elections in accordance with section 272-85 of Schedule 2F to the ITAA 1936.
Where specifying 2004–05 or later year
For 2004–05 and later years, trustees can make family trust elections specifying an earlier year provided certain conditions are met. Generally, these conditions require that from the beginning of the specified year until 30 June of the year immediately preceding the one in which the election is made:
- the trust passes the family control test in section 272-87 of Schedule 2F to the ITAA 1936, and
- any conferrals of present entitlement to, or any actual distributions of, income or capital of the trust during that period have been made on or to the individual specified in the election or members of that individual’s family group; see subsection 272-80(4A) of Schedule 2F to the ITAA 1936.
As subsection 272-80(4A) of Schedule 2F to the ITAA 1936 applies to elections specifying a year before the year in which the election is made, trustees using the Family trust election, revocation or variation 2023 to make a family trust election can specify the 2004–05 or later year provided the above conditions are met.
Conditions for varying a family trust election
The specified individual in a family trust election can be varied where:
- the new individual was a member of the family of the original specified individual at the election commencement time
- no conferrals of present entitlement to, and distributions of, income or capital have been made (by the trust or an interposed entity) outside the new specified individual’s family group during the period in which the family trust election has been in force, and
- the trust meets the related conditions in subsections 272-80(5A), (5B), (6B) and (8) of Schedule 2F to the ITAA 1936 which includes specific time periods during which the specified individual in a family trust election can be varied.
In addition to this, subsections 272-80(5C) and (5D) of Schedule 2F to the ITAA 1936 contain the conditions under which the specified individual can be varied if, as a result of a family law obligation arising from a marriage breakdown, the control of the trust passes to a new specified individual or their family members.
Conditions for revoking a family trust election
The trustees of a trust may revoke a family trust election where:
- the family trust is a fixed trust at the beginning of the specified year and the trust satisfies all the other conditions set out in subsections 272-80(6) and (7) of Schedule 2F to the ITAA 1936, or
- under legislative changes that took effect on 1 July 2007
- at any time while the election was in force, the trust, or another entity, has not recouped a tax loss or claimed a deduction for bad debts, or a beneficiary of the trust has not received a franked distribution indirectly through the trust in relation to which the beneficiary was entitled to franking credits, only as a result of the election being in force, and
- the trust must also satisfy the related conditions in subsections 272-80(6A), (6B) and (8) of Schedule 2F to the ITAA 1936 which includes specific time periods during which a family trust election can be revoked in this situation.
How to complete the Family trust election, revocation or variation 2023
Write the tax file number (TFN) of the trust in the space provided.
All trustees using the Family trust election, revocation or variation 2023 must complete items 1, 2 and 3 if it applies.
If the trustees are making a family trust election specifying the 2004–05 or later year, complete Section A.
Trustees must provide all the information required in Section A for a family trust election specifying the 2004–05 or later year to be made in accordance with section 272-80 of Schedule 2F to the ITAA 1936.
When making a family trust election, make sure you write either 2005 or a later income year (as appropriate) in Section A, item 6 in the Income year specified box.
If the trustees are revoking a family trust election in 2022–23, complete Section B.
Trustees must provide all the information required in Section B for a family trust election to be revoked in accordance with subsections 272-80(6) to (8) of Schedule 2F to the ITAA 1936.
If the trustees are varying the specified individual, complete item 6 or 7 (depending on which is applicable) and Section A, item 8.
Trustees must provide all the applicable information required for the specified individual in their family trust election to be varied in accordance with subsections 272-80(5A) to (5D) and (8) of Schedule 2F to the ITAA 1936.
Although it is not an offence not to quote a TFN, any TFN required on this form is information which the Commissioner requires within the meaning of subsection 272-80(3) of Schedule 2F to the ITAA 1936. If the TFN of a person or entity is required on the Family trust election, revocation or variation 2023 and the relevant person or entity does not have a TFN, print X in the box provided.
Where the Family trust election, revocation or variation 2023 is used to make a family trust election, every trustee of the trust must sign and date the form at the time the family trust election is made. If a trustee is a company, the company’s public officer must sign for that corporate trustee.
Where the Family trust election, revocation or variation 2023 is used to revoke or vary a family trust election, every trustee of the trust must sign and date the form at the time the:
- 2023 tax return for the trust is lodged with this form, or
- Family trust election, revocation or variation 2023 must be given to the Commissioner.
If a trustee is a company, the company’s public officer must sign for that corporate trustee.
A family trust election
To make a family trust election, complete the Family trust election, revocation or variation 2023. The completed form can be sent to us at the address below.
To revoke or vary a family trust election where the 2023 tax return for the trust is required, complete the Family trust election, revocation or variation 2023. Include it as part of the tax return and send it to the address below.
To revoke or vary a family trust election where the 2023 tax return is not required, complete the Family trust election, revocation or variation 2023. You must send it to the address below no later than 2 months after the end of 2022–23.
If you need more time to revoke or vary the election, with or without the 2023 tax return, write to us before the due date requesting an extension of time, stating the reasons for the delay and the proposed date for lodging the form and tax return.
Send your completed form and tax return to:
Australian Taxation Office
GPO Box 9845
(insert the name and postcode of your nearest capital city)
For example:
Australian Taxation Office
GPO Box 9845
SYDNEY NSW 2001