Division 7A and Unpaid Trust Distributions to Corporate Beneficiaries

Published on 16 Mar 2010 | Took place at Hotel Grand Chancellor, Launceston, TAS

On 16 December 2009, the ATO released draft ruling TR2009/D8 setting out its views on the potential application of Division 7A where there is an unpaid trust distribution to a company beneficiary. What started out at the beginning of 2009 as somewhat of a passing comment in an ATO presentation, has turned into a major concern for private clients and advisors.

The draft ruling addresses circumstances when an unpaid distribution has been converted to a loan, or amounts to the provision of "financial accommodation" and so is caught by Division 7A.

This event analysed the draft and its implications and also discussed the exposure draft legislation covering the Division 7A amendments announced in the May 2009 budget.