Division 7A Miscellaneous 2015

TR 2010/3 on UPEs and Div 7A: An unwelcome U-turn?

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2015


The utilisation of unpaid present entitlements by close-knit groups involving trusts and private corporate beneficiaries to retain working capital at the corporate tax rate was so prevalent that it became a cause for concern. In response, in 2009, the ATO took an unwelcome U-turn to regard certain unpaid present entitlements (UPEs) as loans. In the absence of judicial authority, the ATO faced a daunting task of using Div 7A of the Income Tax Assessment Act 1936 (Cth) to regulate UPEs against a backdrop of well-established legal and equitable principles. The result is TR 2010/3, which leaves taxpayers and advisers in an unsatisfactory state of flux, with significant administrative, commercial and legal ramifications.

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  • Published By: Cindy Chan
  • Published On:1 Apr 2015

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Division 7A Miscellaneous 2015

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