Proactive Strategies for Division 7A: Preventing Issues and Resolving Challenges in Practice

Rarely is Division 7A out of the tax practitioner’s news. Either its tentacles are spreading wider than first thought, or the complexities of the Division are resulting in arrangements falling foul of the ATO. This session explores the issues encountered in practice, including:

• Terms in a trust deed that are relevant to determining the Division 7A implications of UPEs
• The issues when a private company beneficiary doesn’t call for payment of its entitlement to a trust distribution (Bendel and C of T Interim Decision Impact Statement)
• How should accountants account for UPEs to beneficiaries if:
  • Bendel survives the appeal at the Federal Court?
  • the ATO is successful with its appeal?
• Action to take if a UPE to a private company that was placed on a 7 or 10 year sub-trust arrangement matures (PCG 2017/13)
• Situations in practice being inadvertently missed where Division 7A can apply to a loan from a private non-resident company
• Tips to avoid Division 7A issues arising and the ATO relief available if they do
• What credence should practitioners give to the previously announced targeted amendments to Division 7A?
• Practical examples