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Division 7A: How to identify problems to be fixed under PSLA 2007/20 paper


This paper is intended as preparatory to a presentation to be delivered by Mr Dominic Belvedere from the ATO concerning the ATO's views on the operation of section 109RB of the Income Tax Assessment Act 1936 ("ITAA1936") and the exercise of the discretion afforded to the ATO under that section as outlined in Practice Statement PSLA 2007/20. This paper does not therefore address the issues that arise out of the Practice Statement and the calculations required to take a "corrective action". I refer you to the published ATO factsheets for the calculations, and published National Tax Liaison Group meeting minutes (available from for identification of some of the calculation issues.

This paper covers:

  • a brief history of Division 7A
  • dates connected with Division 7A
  • rules applying prior to 4 December 1997
  • rules applying from 4 December 1997
  • common errors in company loans that may require corrective action to be taken
  • rules applying from 27 March 1998
  • rules applying from 12 December 2002
  • changes on 19 February 2004
  • common errors in TRUST loans that may require corrective action to be taken
  • 1 July 2006 changes.

Author profile

Andrew Noolan CTA
Andrew is a partner in the Sydney law firm Brown Wright Stein Lawyers. His clients are accountants and lawyers in public practice that require advice on tax issues impacting on their clients. Andrew specialises in tax issues common to the SME and high wealth individual sectors. - Current at 23 September 2019
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