In the 2018-19 Budget, the Government announced that it will extend a specific anti-avoidance rule for closely held trusts engaging in circular trust distributions to family trusts. Currently, where family trusts act as beneficiaries of each other in a 'round robin' arrangement, a distribution can be ultimately returned to the original trustee in a way that avoids any tax being paid on that amount. The Government has prepared draft legislation giving effect to the Budget announcement, which will better enable the ATO to pursue taxpayers entering into these arrangements and impose tax on such distributions at a rate equal to the top personal tax rate plus Medicare Levy. This change will apply from 1 July 2019. The Government is seeking stakeholders' views on the exposure draft legislation and accompanying explanatory materials implementing this measure.