Division 7A loan repayments

Division 7A loan repayments - The emerging problems with common practices… and solutions

Nexia Australia invites practitioners to watch this webinar recording on one of the most important matters for which clients look to you to manage on their behalf.

Division 7A is a topic for which every SME practitioner must have a working knowledge. However, there are flaws in some established practices for effecting the minimum annual repayment. This exposes your client – and you, the tax agent – to risks, and awareness is growing. However, there are solutions, and simple ways of implementing them.

This session is for practitioners of all levels of experience, and a good precursor to a future session on the long-awaited reforms to Division 7A.

This webinar recording covers:

Loan repayments by direct set-off against a dividend:
- What if the minutes or dividend statement are prepared late?
- Compromise the minimum annual repayment?
Loan repayments by round-robin set-off against a dividend:
- Circular round of payments by journal entries
- Not legally effective payments – Division 7A breach!
- ATO’s position?
- Asset protection risk
Solutions to ensure Division 7A repayments each year are effective, including:
- Utilising a template assignment deed available for purchase from a law firm
- Template letter that will accompany the above
- Process for educating clients, implementing for those who give the go-ahead, and covering your tax agent risk for those who don’t
Practical examples