The purpose of this paper is to seek stakeholder views on the Government’s proposed implementation of the amendments to Division 7A of the Income Tax Assessment Act 1936.
The amendments draw on recommendations from the Board of Taxation and include:
- simplified Division 7A loan rules to make it easier for taxpayers to comply;
- a self-correction mechanism to assist taxpayers to promptly rectify breaches of Division 7A;
- safe harbour rules for the use of assets to provide certainty and simplify compliance for taxpayers;
- technical amendments to improve the integrity and operation of Division 7A while providing increased certainty for taxpayers; and
- clarification that unpaid present entitlements (UPEs) come within the scope of Division 7A.
The outcomes of this consultation process will inform the development of legislation required to implement these measures.