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Division 7A & UPEs - Crunch Time is Now!

Published on 09 Mar 2012 | Took place at Citigate, Perth, WA

Crunch time for dealing with unpaid present entitlements (UPEs) arising after December 2009 is upon us. Lodgement due dates for 2011 tax returns potentially trigger negative tax consequences for UPEs arising in the 2009/10 income year which have not been properly dealt with. It is vital for practitioners dealing with UPEs to have a strong understanding of the ATO’s position on these and a plan for managing their clients’ exposures.

The ATO’s ruling TR 2010/3 and Practice Statement PS LA 2010/4 have significant implications for clients operating a family trust with a corporate beneficiary. The Tax Institute was fortunate to have secured two senior ATO presenters for this event who explainrf the ATO’s position, in addition to senior tax practitioners who examined the implications of the ATO’s views.

The emergence of the UPE issue also provides an opportunity for practitioners to revisit some of the mechanics and provisions of Division 7A which may have been overlooked in the past, as well as some other recent changes to the legislation. This event covered recent changes to Division 7A as well as focussing on the “sleeper” issue of calculation of a company’s distributable surplus.

Please note that the paper presented by Ross Prosper was written by Greg Nielsen and was originally presented at the Tasmanian Convention 2011 on 13 October and can be downloaded there.

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

Individual sessions

Recent changes to Division 7A

Author(s):  Ross Prosper

This presentation covers:

  • use of company assets
  • provision of asset for use
  • available for use
  • multiple users
  • valuation of payment
  • exceptions
  • minor benefits.
Materials from this session:

Practice statement PSLA 2011/19 - Exercise of the Commissioner’s discretion under Section 109RB

Author(s):  Mathew UMINA

This presentation covers:

  • background
  • overview of Section 109RB
  • administrative law principles
  • does Division 7A apply?
  • administrative review.
Materials from this session:

Interposed entities - Tips and traps

Author(s):  Fiona Dillion

This presentation covers:

  • payments and loans through interposed entities
  • trusts:
    • unpaid present entitlements - The ATO view
    • subdivision EA - The basic case
    • chains of entitlements - Section 109XI
    • changes on the horizon.
Materials from this session:

Division 7A & UPE's

Author(s):  Michael Gastevich,  Tom Hodgkins

This presentation covers:

  • financial accommodation
  • quarantined loans prior to ruling
  • impact on use of corporate beneficiary
  • implementation of sub trust arrangement.
Materials from this session:

Division 7A & UPE's - Practical examples

Author(s):  Michael Gastevich,  Tom Hodgkins

This presentation covers practical examples of Division 7A & UPE's.

Materials from this session:

Distributable surplus

Author(s):  Grant Ainscoe

This paper covers:

  • calculation
  • distributable surplus
  • interaction with Division 7A.
Materials from this session: