ATO extends FTDT GIC amnesty to mid-2027, making a ‘bigger issue a little bit easier to swallow’

One of the biggest issues for accountants is that the FTDT system and its family control test is overly complex, and identifying where elections have been made is like finding a “needle in a haystack”.

Speaking with Accountants Daily, Dianne Hanna, an accountant with more than 25 years of experience, told the brand that, while the remission gives accountants time, it is not a long-term fix.

She noted that although the six-month extension of the amnesty is welcome, the underlying issue is figuring out whether an election had been made in a new client’s trust.

This GIC amnesty was introduced last year off the back of the GIC becoming non-deductible.

“Since August 2025, we’ve been providing an opportunity for general interest charge (GIC) remission on family trust distribution tax (FTDT),” the ATO noted on its website.

Accountants are facing increased mental burden as a result of FTDT and the other tax changes because of the natural proximity that accountants have with their clients.

“Accountants and tax agents just want to do the best for their clients, so it’s really hard when they’re just overwhelmed with wanting to do the best for all of their clients, and there’s just so much coming at them at once,” Lee-Ann Hayes, head of education at Accurium and TaxBanter, told the brand.

“Just to have some relief from that, I think, will be welcomed. Is it enough? I’m not quite sure – I think there’s just so much going on, that will just give agents some reprieve till they get to the next thing,” Hayes said.

“[Accountants] feel like they’re just being bombarded with everything at the moment, and they’re carrying that burden on behalf of their clients.”

Accountants are struggling

While Hayes said the extension of time on the remission is welcomed, Hanna said it is not solving the larger issue.

“The GIC component of these debts is quite sizable,” Hanna said.

“Perhaps [the ATO is] trying to make a bigger issue a little bit easier to swallow.”

For both accountants, the GIC is punitive as many tax agents trip FTDT on behalf of their clients without knowing.

“For tax agents who, over the years, have taken on new clients with inherited trust structures, it’s like searching for a needle in a haystack to identify any of these family trusts on their lodgement list that may be caught within FTDT. In which case an additional six months on its own may not be enough,” Hanna said.

Hanna noted that if someone had $100,000 of FTDT, it is liable from the time the distribution was made outside of the family distribution group.

“If you didn’t pay that back in 2005, in today’s terms, the GIC would be more than 10 times what the FTDT would have been,” Hanna said.

“The GIC is quite punitive because it’s catching a lot of taxpayers out unaware, with possibly no real foul play in some instances.”

While reform to the FTDT system is not on the government’s cards, the accountants stressed that practitioners must ensure that they look after themselves as they face a growing amount of work and burden.

“It’s important that as advisors we take a breath. There’s a lot happening at the moment. There’s a lot of things going on. If we look specifically at trusts, there is so much going on that it is so easy to become overwhelmed,” Hanna said.

Hayes said: “Rely on your network, have a really good network that you can bounce ideas off so you know you’re not alone, and you can talk through some of the technical changes, see what other people are doing, see where there are blind spots that you’re not even aware of. That might give you some support that you need to help you get through navigating the ongoing wave of changes that we’re dealing with.”