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Unpaid present entitlement paper


This paper discusses the classification and taxation of loans and unpaid present entitlements under
Division 7A ITAA 1936 and the comments made by Deputy Commissioner Mark Konza on 31 March 2009. Particular topics covered are:

  • what constitutes a loan and an UPE
  • identification of uncertainties for applying Subdivision EA
  • the potential risks of misdescribing a UPE as a loan in the accounts
  • the potential application of Division 7A to amount held on sub trust
  • the management of sub trust amounts retained by the head trust.

The paper also considers the recent statements in the press regarding the ATO's view on the taxation of trusts.

Author profile

Ronald Jorgensen CTA
Ron Jorgensen, CTA, is a Partner at Rigby Cooke Lawyers. Ron principally consults on Commonwealth and state tax laws, tax dispute resolution and compliance enforcements, and specialises in trusts and trust disputes, succession and asset protection, business and investment structuring and tax-sensitive commercial and property transactions. Ron is an Accredited Specialist in Tax Law, a member of the Law Institute of Victoria and a respected technical writer and presenter. Ron is a fierce advocate for taxpayers. - Current at 04 August 2016
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Individual sessions

Unpaid present entitlement

Author(s):  Ron JORGENSEN

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