Date posted: 02/05/2022

Submission on TD 2022/D1 dealing with unpaid present entitlements and Division 7A

CA ANZ has lodged a submission on the ATO’s draft determination TD 2022/D1 dealing with unpaid present entitlements and Division 7A. Main issues raised in the submission include:

  • The change in the timing of the financial accommodation for unpaid present entitlements in the draft determination creates unnecessary complexity. CA ANZ recommends the ATO should adopt a practical approach regarding the timing of the provision of financial accommodation. A uniform approach to timing should be adopted consistent with PS LA 2010/4 whereby the financial accommodation was taken to be provided in the year following the present entitlement.
  • Further clarification is required to deal with the situation where what is set aside in the sub-trust is a non-cash asset (e.g. real property) as it is unclear if use of the asset by the shareholder/associate with the company’s knowledge amounts to the provision of financial accommodation or something else.

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