Income Splitting

A popular use of family trusts is to share family income evenly to minimise tax.

We propose an income splitting policy that allows families with children to reduce their income tax by attributing earned income of one partner to the other partner for the purposes of assessing personal income tax.

There would be a limit.

At the same time we would change the rules of family trusts to stop them being used for income splitting purposes. We would also restructure the Family Tax Benefit.

Families earning less than $150K per year will be unaffected or better off. Families earning above $150K who have been using family trusts will be potentially worse off.