From sladen.com.au: The Full Federal Court’s decision in FCT v Bendel determined that an unpaid trust distribution (unpaid present entitlement) to a corporate beneficiary does not constitute a loan under Division 7A of the Income Tax Assessment Act 1936, as there is no obligation to repay.

The article discusses the implications of this ruling for self-managed superannuation funds (SMSFs), noting that the definition of a ‘loan’ under the Superannuation Industry (Supervision) Act 1993 aligns with Division 7A but is broader in that it includes financial accommodation regardless of enforceability.

It suggests that the reasoning in Bendel may similarly apply to the SIS Act, indicating that a true loan arrangement requires an obligation to repay.