What is a division 7A loan?
A division 7A loan is a loan by a private company that follows the division 7A requirements. These requirements can be found on the ATO website. Under this division, the borrower must make minimum yearly repayments, before the lenders income year is over.
What are the changes?
For the 2019/2020 year borrowers could apply for an extension for their minimum yearly repayment. If the extension was granted, then you must make up the shortfall by the 30th of June 2021.
However, this extension has been given for another year due to COVID. Therefore, people can apply for an extension in relation to the minimum yearly payment for the 2020/2021 financial year. Borrowers who used the extension in the 2019/2020 year may chose to apply for another extension. This extension means that unless another administrative relief package is given for next year, these debts must be paid by the 30th of June 2022.
In order to test your eligibility for the relief package you can go to the ATO website or use the link below.
For more information or assistance please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au