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Sub-trusts ‘redundant’ under final Div 7A ruling

Sub-trusts have been made redundant by the ATO’s final tax determination on Division 7A released this week, according to the Tax Institute.

Sub-trusts ‘redundant’ under final Div 7A ruling
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  • Shared from accountantsdaily.com.au
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  • July 18, 2022
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  • 1 minute read
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Sub-trusts ‘redundant’ under final Div 7A ruling
Tax and commercial incentives no longer existed, said senior advocate at the institute Robyn Jacobson, as previous arrangements involving sub-trust interest-only loans were no longer available under TD2022/11 from 1 July.

“The interest-only aspect was the most attractive commercial feature of sub-trust arrangements,” Ms Jacobson said. “From a tax perspective, it may be that little benefit can be gained from implementing a sub-trust arrangement for unpaid present entitlements arising on or after 1 July 2022.”

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