1)
A private company has made a loan to another entity (e.g., a trust), this has been recorded as an intercompany loan for related party transactions. Should this be treated as Div 7A?
2)
In the financial statements for xyz Pty Ltd appears a loan receivable balances for Trust A & Trust B. Upon reviewing the minimum yearly repayment requirements, it has come to our attention that these have not been met. As a result, a deemed dividend would need to be recorded.
Our concern is determining the correct party against whom to record the deemed dividend ?
Specifically, we are uncertain whether it should be attributed to:
- Z Pty Ltd as the shareholder of xyz Pty Ltd (Z Pty Ltd is the trustee of the Unit Trust and Z Pty Ltd is not a trading entity), or
- The actual loan recipients: Trust A & Trust B or
- Trust given that ASIC documents indicate Z Pty Ltd has “No” beneficiaries held.
Could you please advise on the correct party against whom to record the deemed dividend ?
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111 views2 replies
2 replies
111 views
2 replies