Division 7A structuring: The contortionist revisited
Source: The Tax Specialist Journal Article
Published Date: 1 Mar 2017
Under the 2016 federal Budget amendments, quarantined pre-4 December 1997 loans and pre-16 December 2009 unpaid present entitlements (UPEs) may become subject to new loan rules. In addition, 30 June 2010 subsisting UPEs on a seven-year interest-only investment agreement will require principal repayment by 30 June 2018, presenting cash-flow problems for family groups that advisers must address now. This article discusses and assesses the risks of Div 7A loans, UPE compliance management and repayment planning options, and the potential impact of proposed Div 7A reforms. The author also analyses: the intersection of Div 7A deemed dividends, Div 245 debt forgiveness, Div 974 at-call loans, and s 100A reimbursement agreements on UPEs; the impact of the Board of Taxation and 2016 federal Budget proposed reforms; strategies for the management of pre-1997 loans and UPEs and pre-2009 quarantined UPEs; and strategies for repaying and restructuring loans and UPEs so that Div 7A does not apply.
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Details
- Published By: Ron Jorgensen CTA
- Published On:1 Mar 2017
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