Division 7A loan repayments - The emerging problems with common practices… and solutions
Nexia Australia invites practitioners to a webinar 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 session will cover the following:
- 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
