From www.accountantsdaily.com.au: The recent Bendel decision, where the Full Federal Court ruled that UPEs are not considered loans for Division 7A purposes, may influence the ATO to utilize section 100A more vigorously against perceived tax avoidance involving UPEs.

Tax expert John Jeffreys noted that while the ATO continues to claim its stance on UPEs is correct, the court’s ruling suggests that merely leaving an entitlement unpaid without an explicit agreement might not constitute a reimbursement agreement under section 100A.

This legal shift could strengthen taxpayers’ positions, illustrating that UPEs outstanding for commercial reasons may qualify as ordinary dealings rather than tax-driven arrangements.