Division 7A Traps – Loan Repayments that are NOT Loan Repayments! Division 7A (or Div 7A for short!) is an anti-avoidance measure designed to prevent private companies from making tax-free distributions of profits to shareholders or to their associates in the form of payments, loans, forgiven debts or via the use of private company assets. [...]
Distributing to Corporate Beneficiaries and Division 7a Tax Consequences If you have a Trust in your operating or investment structure, it is crucial that you have a basic understanding of your Div 7A obligations. For those who’d like to undertake some additional reading on this topic, refer to ATO Tax Ruling TR 2010/3 or ATO Practice [...]
Dealing with Division 7a for Private Company Loans Division 7a (Div 7a) is a subject that comes up regularly for our clients that have a private company in their operating or investment structure. This is a complex area of taxation law and this article only scratches the surface. Div 7A deals with shareholders or a shareholder’s associate inappropriately [...]
I’d like to kickstart the discussion on crowdfunding and the pozible application of Income Tax and Goods and Services Tax (GST). Parties seeking crowdfunding generally adopt a donation based, rewards based, equity based or debt based model and there are generally three parties in a crowdfunding arrangement: the initiator of the project or venture (the ‘promoter’); the organisation providing [...]
Distribution of Trust Income Let’s get the nasty warning out of the way first! If the Trustee does not validly make a resolution for the distribution of trust income by 30 June (or earlier if the Trust Deed requires!), the taxable income of the trust will be assessable in the hands of the default beneficiary (provided the [...]
