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Unpaid present entitlement paper


This paper discusses the classification and taxation of loans and unpaid present entitlements under
Division 7A ITAA 1936 and the comments made by Deputy Commissioner Mark Konza on 31 March 2009. Particular topics covered are:

  • what constitutes a loan and an UPE
  • identification of uncertainties for applying Subdivision EA
  • the potential risks of misdescribing a UPE as a loan in the accounts
  • the potential application of Division 7A to amount held on sub trust
  • the management of sub trust amounts retained by the head trust.

The paper also considers the recent statements in the press regarding the ATO's view on the taxation of trusts.

Author profile

Ronald Jorgensen CTA
Ron principally consults on Commonwealth and State tax laws, tax dispute resolution and compliance enforcement. Ron specialises in trusts and trust disputes, succession and asset protection, business and investment structuring and tax sensitive commercial and property transactions. Ron is an Accredited Specialist Tax Law and member of the Tax Law Advisory Committee with the Law Institute of Victoria. He is a member of the Property and Commercial Law Committee of the Law Society of Tasmania. Ron is a Chartered Tax Advisor and member and former chair of the States Taxes Committee (Vic) of The Tax Institute. Ron was recognised by Doyle’s Guide Leading Tax Lawyer - Victoria for 2015 to 2021 and Best Lawyers for tax law - Australia 2021 and Global 2021. - Current at 16 July 2021
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Unpaid present entitlement

Author(s):  Ron JORGENSEN

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