Division 7A is one of those items that can sneak up on a company or a group of companies, often unintentionally. The consequences can be severe:
- The potential additional tax impost can be as high as 62.55% of the income earned
- The potential cash flow consequences of having to repay the funds to the company.
- The potential exposure of the funds taken, to a liquidator and/or unsecured creditors who may potentially make a claim on the company that is exposed.
We have developed a list of strategies and structures to help mitigate the potential exposure to Division 7A and the ripple effect that it may have on the business and its stakeholders, and help those affected manage the process.
Unpaid Beneficiary Entitlements