[vc_row][vc_column][vc_column_text]Maturing 2021, 7 or 10 year sub-trusts. ATO guidance finally on June 30 2021
Many of us have been wondering how to deal with 2021 maturing sub-trusts and were always hopeful of continued relief from the ATO.
Whilst too late for some who perhaps had paid dividends or actually repaid the Corporate Beneficiary the relief did arrive on June 30.
Updated Practical Compliance Guideline PCG 2017/13
On 30 June 2021, updated Practical Compliance Guideline PCG 2017/13 to cover 2021 maturing Option 1 (7-year) sub-trust arrangements and for the first time (10-year) sub-trust arrangements maturing in the 2021 income year.
The PCG explains that the Commissioner will accept that a 7-year loan on complying terms in accordance with Section 109N of the Income Tax Assessment Act 1936 may be put in place between the sub-trust and the private company beneficiary prior to the private company’s lodgment day. This will provide a further period for the amount to be repaid with periodic payments of both principal and interest.
For most companies the relevant date for the loan agreement is May 15 2022
Example of maturing 10 year sub-trust from the PCG[/vc_column_text][mk_image src=”https://trovegroup.com.au/wp-content/uploads/2021/07/unnamed.png” image_size=”full” target=”_blank”][mk_button dimension=”outline” corner_style=”rounded” size=”medium” url=”https://www.ato.gov.au/law/view/document?DocID=COG/PCG201713/NAT/ATO/00001″ target=”_blank” outline_skin=”custom” outline_active_color=”#07263f” outline_active_text_color=”#07263f” outline_hover_bg_color=”#c4a16d” outline_hover_color=”#07263f”]Link to PCG[/mk_button][/vc_column][/vc_row]
