From taxbanter.com.au: On December 11, 2024, the ATO released updates regarding Division 7A that affect private company loans and payments involving guarantees, specifically addressing the role of interposed entities.
The new guidelines specify that if a private company guarantees a loan made by a non-private company, it may result in a deemed dividend if certain conditions, such as insufficient distributable surplus and the reasonable person test, are met.
Companies are advised to review their financing arrangements to identify potential implications from the updated Division 7A provisions.