12 Sep 08 ATO teleconference to discuss Division 7A and definition of distributable surplusThe ATO in TD 2007/D9 (now withdrawn) confirmed that subsection 109Y(2) ITAA 1936 provides that the distributable surplus for Division 7A purposes is calculated as at the end of the company’s year of income and can be reduced by present legal obligations of the company. However, in TD 2008/D8 the ATO has apparently completely reversed its view. Concerns were raised by the professional associations as part of the NTLG agenda setting process. The matter was not discussed at last weeks NTLG (see 2008 TAXVINE No 35 (1) (6 September 2008)) as the ATO had agreed to hold an out of session teleconference on Thursday 11 September 2008 to discuss the matter.
A TAXVINE update will be provided next week on any important outcomes from the meeting.