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arthurwong(Enthusiast)Enthusiast
16 Dec 2024

Hello:


I have a problem about the related-party loans.


If an individual beneficiary owes money to the family trust, would this lead to a div 7a (or like) problem? Or in this case no company is involved so it is acceptable?


What if the a trust beneficiary owes money to the family trust? Is there any div 7a problem?


I've searched on the internet but cannot find any related information.


Can anyone explain this a bit and if possible provide any legislation related to this field?

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1,260 views
3 replies

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Bruce4Tax(Taxicorn)Taxicorn
16 Dec 2024

What if the a trust beneficiary owes money to the family trust? Is there any div 7a problem?


Maybe - if company makes the loan to the trust, and trust make a loan to individual.



Can anyone explain this a bit and if possible provide any legislation related to this field?


Google ATO Division 7A

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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
16 Dec 2024

What if the a trust beneficiary owes money to the family trust? Is there any div 7a problem?


Maybe - if company makes the loan to the trust, and trust make a loan to individual.



Can anyone explain this a bit and if possible provide any legislation related to this field?


Google ATO Division 7A

arthurwong(Enthusiast)Enthusiast
17 Dec 2024

Thanks mate.


So it is only the company-trust loan balance to determine?


If trust is not owing to the company, then any overdrawn amount by individual beneficiaries or trust beneficiaries from the trust will not have Div 7A problem?


If the trust is owing to the company, then the overdrawn by individual beneficiaries or trust beneficiaries from the trust will have Div 7A problem because "Division 7A applies to certain loans made by private companies to a shareholder or their associate through interposed entities."

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Individual beneficiary owing money to the family trust | ATO Community