Division 7A

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UPEs as loans - end of an era?

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UPEs as loans - end of an era?

If 16 December 2009 was the beginning of the Australian Taxation Office (ATO) treating an unpaid present entitlement (UPE) with a corporate beneficiary as a loan for purposes of Division 7A, could 28 September 2023 be the end of that era?

Sladen snippet – LRBA and Div 7A interest rates to significantly increase in 2023/24

Sladen snippet – LRBA and Div 7A interest rates to significantly increase in 2023/24

The recent interest rate rises will result in significant increases in the LRBA safe harbour interest rates, and the Division 7A interest rate, for the 2023/24 year.  The interest rates will be:

  • LRBA real estate safe harbour interest rate – 8.85% (was 5.35%)

  • LRBA listed share safe harbour interest rate – 10.85% (was 7.35%)

  • Division 7A interest rate – 8.27% (was 4.77%)

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TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others

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TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others

We wrote about Draft Taxation Determination TD 2022/D1 (Draft TD) on Division 7A and unpaid present entitlements (UPEs) here. On 12 July 2022, the Australian Taxation Office (ATO) finalised the Draft TD as Taxation Determination TD 2022/11 (Final TD).

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PCG 2017/13: sub-trust arrangements – welcome (continued) relief from the ATO

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PCG 2017/13: sub-trust arrangements – welcome (continued) relief from the ATO

Draft Taxation Determination TD 2022/D1 sets out the Australian Taxation Office’s (ATO) views on when an unpaid present entitlement (UPE) with a corporate beneficiary is a loan for the purposes of Division 7A of the Income Tax Assessment Act 1936. We wrote about TD 2022/D1 here.

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Draft Taxation Determination TD 2022/D1: much ado about nothing or a seismic shift?

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Draft Taxation Determination TD 2022/D1: much ado about nothing or a seismic shift?

After our semi-serious opening statement on the Australian Taxation Office’s (ATO) recently released guidance on section 100A and unpaid present entitlements, this is one of a series of deep-dive articles on that guidance. These articles look at each of the ATO guidance products separately and then we discuss what the overall impact may be.

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Sladen Snippet: Division 7A and COVID-19: ATO announces streamlined process to kick the can down the road

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Sladen Snippet: Division 7A and COVID-19: ATO announces streamlined process to kick the can down the road

On 26 June 2020, the Australian Taxation Office (ATO) announced a streamlined process for COVID-19 affected borrowers to make applications under section 109RD to extend the time to make minimum yearly repayments (normally required to be made by 30 June 2020) under Division 7A.

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ATO announces extension for Division 7A compliance

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ATO announces extension for Division 7A compliance

As part of its response to COVID-19, on 13 May 2020 the Australian Taxation Office announced that it has extended the time for lodgment of 2019 tax returns for certain companies and trusts and made changes to its administration of Division 7A of the Income Tax Assessment Act 1936.

Labor’s Tax Policies and What They Mean for Discretionary Trusts

Labor’s Tax Policies and What They Mean for Discretionary Trusts

Discretionary trusts are prevalent in the small to medium enterprise (SME) market due to their income tax effectiveness, distribution flexibility, and asset protection features. However, this may be about to change. The Australian Labor Party (ALP) has proposed a number of amendments to existing tax laws should they win the election on 18 May 2019.