Transactions through interposed entities

Division 7A may also apply where:

• a private company pays or loans an amount to an interposed entity on the understanding that the interposed entity or another interposed entity will pay or loan an amount to a shareholder or their associate
• a trust makes certain payments or loans to an interposed entity on the understanding that the interposed entity or another interposed entity will pay or loan an amount to a shareholder or their associate of a private company with an unpaid present entitlement (UPE) to the profit of the trust. Where another trust is interposed between the private company and the trust from which the payment or loan is made, the company can be taken have a UPE from the net income of the trust making the payment or loan if certain conditions are satisfied.

See also:

• Division 7A - payments and loans through interposed entities
• Division 7A - payments and loans through interposed entities involving guarantees
• Division 7A - trust amounts treated as dividends - payments and loans through interposed entities

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• Writing off (forgiving) a debt

Division 7A may apply where a private company pays or loans an amount to an interposed entity on the understanding that the interposed entity or another interposed entity will pay or loan an amount to a shareholder or their associate of the company.