What does the proposed new Division 7A mean to your existing loan?

On 22 October 2018, Treasury released a consultation paper to seek views on proposed amendments to Division 7A. The new regime proposes substantial changes that may affect taxpayers significantly and increase compliance costs considerably. We reported on the key elements of Treasury’s consultation paper here.

We have prepared a summary document outlining the practical changes for pre-1997 loans and 7-year and 25-year loans that are currently in place. The linked document contains a table illustrating how Division 7A repayments are made under the current law and how they will be made under the proposed new regime. In addition, we discuss the reasons why some taxpayers may want to consider converting their existing 7-year loans into a 25-year loans before 30 June 2019. The summary is available to download below:

To discuss or for further information please contact:

Patricia Martins
T +61 3 9611 0138
E: pmartins@sladen.com.au

Daniel Smedley
Principal | Accredited Specialist in Tax Law
M +61 411 319 327|  T +61 3 9611 0105
E: dsmedley@sladen.com.au

Neil Brydges
Special Counsel | Accredited specialist in Tax Law
M +61 407 821 157 | T +61 3 9611 0176
E: nbrydges@sladen.com.au