Pitcher Partners Advisors Proprietary Ltd ABN 80 052 920 206
Ref: AMK:lg
Level 13, 664 Collins Street Docklands VIC 3008 Level 1, 80 Monash Drive Dandenong South VIC 3175
4 May 2022
Postal Address GPO Box 5193 Melbourne VIC 3001 p. +61 3 8610 5000
Peter Glindemann Australian Taxation Office
By Email: peter.glindemann@ato.gov.au Dear Peter DRAFT TAXATION DETERMINATION TD 2022/D1 - DIVISION 7A: WHEN WILL AN UNPAID PRESENT ENTITLEMENT OR AMOUNT HELD ON SUB-TRUST BECOME THE PROVISION OF 'FINANCIAL ACCOMMODATION'? 1.
Thank you for the opportunity to provide comments on the ATO’s Draft Taxation Determination TD 2022/D1 (“Draft TD”) in relation to the meaning of ‘financial accommodation’ for the purposes of Division 7A1.
2.
Pitcher Partners specialises in advising taxpayers in what is commonly referred to as the middle market. Accordingly, we service many taxpayers that are affected by the ATO’s interpretation of key provisions of Division 7A.
3.
We have previously noted our concern with the new approach in the Draft TD and do not necessarily agree that the approach is consistent with the legislature’s intention in respect of the treatment of unpaid entitlements under Division 7A. We believe that the approach contained in TR 2010/3 is more consistent with the provisions contained in Division 7A and it would have been preferable for any change to have been made by Parliament.
4.
That being said, we understand that the ATO is entitled to change its view and we support an approach that applies the new view prospectively. Accordingly, we generally do not have significant concerns with the proposed new approach and its practical effect.
5.
One key item that we believe must be addressed in when the Draft TD is finalised is the need for a uniform approach regarding the timing of when a Division 7A loan arises to simplify both the compliance with and administration of the rules. While we understand
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Part III of the Income Tax Assessment Act 1936 (“ITAA36”). All legislative references in this submission are to the ITAA36 unless otherwise specified. Adelaide
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Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. B J BRITTEN J BRAZZALE D A THOMSON D A KNOWLES M C HAY
S SCHONBERG S DAHN P A JOSE A R YEO M J HARRISON
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