Division 7A Agreements

Division 7A Agreements

Where a private company has a loan account of a shareholder or beneficiary, the private company cannot use credit on one account to calculate the risk of Division 7A to balance the prepaid credit on another account. Division 7A loan calculations are made in respect of transactions in each shareholder`s loan accounts. Since autonomous superfunds now rely more on related parties for the financing of Limited Recourse Borrowing Arrangements (LRBA) (i.e. loans taken out by a self-administered agent by a third-party lender), it is important to ensure that these agreements are established and maintained at all times under the terms of the terms. . . .

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