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JamesDD(Initiate)Initiate
29 Apr 2024

Hi,

I have some funds in a company bank account (I am the sole director / secretary) which I want to put into a savings account to earn interest.

Interest payable for personal savings accounts is 4.75% or more. Interest on company savings accounts are negligible. Also,there is not the protection of up to $250k for a company.

If I set up a bare trust and put the company funds into a personal savings account in my name (to get the higher interest rate) will the ATO try to attack this by saying it's a Div 7 loan & the interest from the personal savings account is in my name so I have to pay tax on it?

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Bruce4Tax(Taxicorn)Taxicorn
29 Apr 2024

will the ATO try to attack this by saying it's a Div 7 loan & the interest from the personal savings account is in my name so I have to pay tax on it?


If account is in your name, then it is absolutely a Div 7A


A bare trust would still require a trustee, and the beneficiary would have to be the company.


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Bruce4Tax(Taxicorn)Taxicorn
29 Apr 2024

will the ATO try to attack this by saying it's a Div 7 loan & the interest from the personal savings account is in my name so I have to pay tax on it?


If account is in your name, then it is absolutely a Div 7A


A bare trust would still require a trustee, and the beneficiary would have to be the company.


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Can I set up a bare trust to invest company funds? | ATO Community