Published on 01 Nov 12
by SOUTH AUSTRALIAN DIVISION, THE TAX INSTITUTE
This paper looks at a range of issues related to the use of corporate beneficiaries – past, present and future. Practical case studies will work through some of the issues that have arisen, and will continue to arise, due to the popularity of corporate beneficiaries and the fact that many taxpayers still use them even in light of the many changes.
Issues to be explored includes:
- streaming franked dividends to corporate beneficiaries
- continuing appointment of trust net income to companies
- the ongoing impact of quarantined UPEs
- timing of the investment agreement
- when are the payments under the investment agreement required to be accounted for and paid?
- what is the strategy at the end of 7 years or 10 years to pay the sub-trust?
- the implications of creating a Division 7A loan between the company and the trust, including the timing of Division 7A application
- interest deductibility for both sub-trust returns or the interest component of Division 7A 109N repayments
- using the corporate beneficiary as the “balance beneficiary” in the trustee resolution prepared at 30 June
- application of 109XI and other provisions within Division 7A
- refreshing strategies.