Question 4.2 The Board seeks stakeholder views on whether in cases where Division 7A is not taken into account in Family Court orders that the appropriate remedy is for the Commissioner to exercise his discretion under section 109RB to disregard the deemed dividend or whether this issue is more appropriately addressed by ensuring a better understanding of these provisions by litigants and courts. Question 4.3 The Board seeks stakeholder comment on whether Subdivisions EA and EB appropriately balance the complexity of the tax system with protection of the revenue and other policy goals, such as progressivity, or whether it could be more appropriately replaced with another rule (for example, a rule whereby a private company’s unpaid trust entitlements were always treated as a loan or a rule that excludes all UPEs from being loans but increases the scope of Subdivisions EA and EB to other forms of benefits for shareholders or associates). Question 4.4 The seeks information and stakeholder views on: a) whether stakeholders agree with the problems raised in this or the previous chapter with regard to the operations of the provisions in Division 7A. If not, what is your view? b) are there any problems not already identified in this or the previous chapter that should be considered in the review? c) the relative prioritisation of the problems identified (high, medium or low priority). d) what solutions may be for addressing the identified problems, including how they would operate. e) whether Division 7A helps or hinders the maintenance of the integrity of the income tax system. f) whether additional integrity measures are needed. g) other improvements to the operation of the Division, including its interaction with other provisions of the Act that you would like to suggest.
Question 4.2 The Board seeks stakeholder views on whether in cases where Division 7A is not taken into account in Family Court orders that the appropriate remedy is for the Commissioner to exercise his discretion under section 109RB to disregard the deemed dividend or whether this issue is more appropriately addressed by ensuring a better understanding of these provisions by litigants and courts. Question 4.3 The Board seeks stakeholder comment on whether Subdivisions EA and EB appropriately balance the complexity of the tax system with protection of the revenue and other policy goals, such as progressivity, or whether it could be more appropriately replaced with another rule (for example, a rule whereby a private company’s unpaid trust entitlements were always treated as a loan or a rule that excludes all UPEs from being loans but increases the scope of Subdivisions EA and EB to other forms of benefits for shareholders or associates). Question 4.4 The seeks information and stakeholder views on: a) whether stakeholders agree with the problems raised in this or the previous chapter with regard to the operations of the provisions in Division 7A. If not, what is your view? b) are there any problems not already identified in this or the previous chapter that should be considered in the review? c) the relative prioritisation of the problems identified (high, medium or low priority). d) what solutions may be for addressing the identified problems, including how they would operate. e) whether Division 7A helps or hinders the maintenance of the integrity of the income tax system. f) whether additional integrity measures are needed. g) other improvements to the operation of the Division, including its interaction with other provisions of the Act that you would like to suggest.
discussion_paper1.docx