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Credit Loans into Companies: Ignore them at your peril

Published on 04 Aug 2005 | Took place at Melbourne & Olympic Parks, Melbourne , VIC

Do you have a client with a company that borrows from related parties?

On 15 July 2005, the Assistant Treasurer announced various proposed changes relevant to the impact of the debt/equity regime on 'at call' loans. Just when you thought you only needed to focus on debit loans by companies to shareholders and associates, from 1 July 2005, you may also need to also focus on credit 'at call' loans into companies. By ignoring the debt/equity taxation regime, your clients' ability to extract cash from their own companies can be significantly restricted or result in significant taxation liabilities.

These seminar materials will let you find out if and how your client will be impacted and the practical strategies for consideration.

Get a 20% discount when you buy all the items from this event.

Individual sessions

Treating at call loans as equity

Author(s):  Gary CHRISTIE

Matters covered in this presentation include:

  • section 45B risks on repayments - ATO approach
  • non-deductible interest
  • frankable return
  • non-share capital accounts
  • impact of material change to terms of loan
  • international taxation considerations.
Materials from this session:

Treating at call loans as debt

Author(s):  Garry BOURKE

Matters covered in this presentation include:

  • benefits of debt treatment
  • loan agreement terms - length, timing, interest, type (facility or otherwise)
  • treatment of pre 1 July 2005 loans
  • accounting for and monitoring loans
  • re-financing issues
  • FOREX impacts
  • commercial impacts.
Materials from this session:

'At call' loans

Author(s):  Tony RIORDAN

Topics covered in this paper include:

  • what are 'at call' or credit loans?
  • how 'at call' loans fit within the debt/equity provisions
  • taxation and commercial issues raised by debt being treated as equity or as neither debt nor equity
  • SME 'carve out' proposal - do you fit in?
  • 1 July 2005 'start date' and action timing
  • loan documentation considerations
  • commercial considerations - broader impact on structuring, joint ventures, shareholders agreements
  • case study.
Materials from this session: