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Resources on demand

Releasing related party debts: what are the tax and commercial consequences?

We are seeing the release of related party debts as part of the process of winding up entities or for asset protection purposes. Before releasing debts, it is important that advisers understand whether this will have any adverse tax implications or other flow-on effects.

In this webinar, special counsel Murray Shume will look at the issues that can arise when debts are released, with case studies featuring his sheep dog, Bessie.

[Running time: 1 hr]



After this webinar, you will be able to identify:

  • what the gross forgiven amount is under the commercial debt forgiveness provisions
  • the ATO’s current view on the natural love and affection exemption
  • how Division 7A applies to releasing related party debts
  • how to determine a distributable surplus
  • how releasing debts between companies may result in trapped franking credits or having to pay out unfranked dividends.