Deferral of minimum yearly repayments
As part of the ATO's response to COVID-19, the Commissioner
announced on 26 June 2020 that taxpayers suffering the economic
impact of coronavirus and who are unable to meet their minimum
yearly repayments in respect of Division 7A loans will be able to
apply to defer their minimum yearly repayments for 12 months.
Most advisors will be aware that the borrower under a Division
7A loan must make minimum yearly repayments in respect of the loans
on or before 30 June each year. However, under section 109RD
of the Income Tax Assessment Act 1936, the
Commissioner is provided with discretion to disregard a deemed
dividend which would result from the failure to make the minimum
repayments, where the inability to make the payment is due to
circumstances outside of the borrower's control. It is
this administrative power that the Commissioner will rely upon to
allow additional time to make the payment for those taxpayers
adversely
