ATO ID 2005 299
ATO ID 2005/299 | Income Tax: Division 7A: multiple trustee loans and subsection 109XA(4)
Status: May be released
Issue
Where in an income year, a trustee makes loans to different shareholders (or associates) of a private company beneficiary with unpaid present entitlement, do any of the loans give rise to 'previous transactions' for the purposes of applying subsection 109XA(4) of the ITAA 1936 in that same income year?
Decision
No. Where in an income year, a trustee makes loans to different shareholders (or associates) of a private company beneficiary with unpaid present entitlement, none of the loans give rise to 'previous transactions' for the purposes of applying subsection 109XA(4) of the ITAA 1936 in that same income year.
Facts
- Trust has a private company beneficiary with a UPE of $100,000.
- Trustee makes five $100,000 loans to different shareholders in the same year.
- Loans are not repaid by lodgment day.
Reasons for Decision
Subsection 109XA(2) triggers s 109XB for each discrete loan. The provision is not concerned with whether other loans have been made by the trustee in the same income year. Each 'actual transaction' is evaluated separately.
Source: ATO Legal Database