A family company with a corporate trustee distributes earnings to a bucket company. The bucket company pays corporate tax. Subsequently, it lends the remaining money (after tax payment) back to the trust for reinvestment in the stock market. A Div7a Loan agreement is created and will be repaid to the company, including applicable interest. The company will accumulate funds and pay dividends in the future.
I just wanted to check with the community whether there is a red flag from the ATO in this arrangement.
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2,423 views4 replies
4 replies
2,423 views
4 replies