Division 7A Income tax 2017

Division 7A: Dealing with the here and now

Source: The Tax Specialist Journal Article

Published Date: 1 Oct 2017


While purported changes to Div 7A of the Income Tax Assessment Act 1936 (Cth) come and go, practitioners (and the ATO) have to deal with the existing law as it is. This article uses case study examples to focus on several practical issues confronting practitioners in dealing with the complexities of the current regime, and some of the common mistakes, including: (1) who or what is, or is not, an associate of a shareholder (this will include issues with lending to unit trusts and partnerships); (2) the traps in the various interposed entity anti-avoidance rules, including companies acquiring units in unit trusts and the application of these rules to the private use of asset provisions; (3) loans from trusts with unpaid present entitlements (UPEs): which ones count and which do not; (4) dealing with sub-trusts and Div 7A loans created from UPEs since 2010; and (5) PCG 2017/3.

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Division 7A Income tax 2017

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