In October, we wrote about the Bendel case in the Administrative Appeals Tribunal (AAT) concerning whether unpaid distributions of income from a trust are a ‘loan’ for the purposes of Division 7A of the Income Tax Assessment Act 1936.

The answer to this question can have significant tax implications where a trust has made distributions to a company beneficiary.

The ATO have lodged a notice of appeal in the Federal Court.  They have also issued an Interim Decision Impact Statement in which they advise that they will not be revising their current views until the appeal is finalised.

The purpose of the Interim Decision Impact Statement is to discourage taxpayers from seeking to have previous tax assessments altered until the legal position becomes clearer.

The Bendel case may prove to be significant for those with trusts that have made distributions of income to companies.

We will continue to keep you posted on the progress of this case and will contact any affected clients should there be any action required.

In the meantime, get in touch if you would like to learn more about the significance of the Bendel case.

Sky Accountants Ballarat

Phone: 03 5332 8855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 5428 1400

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437