Description
The Tax implications of a Commercial Debt Forgiveness
The Commercial Debt Forgiveness rules give can rise to detailed implications for taxpayers when the investment held by a creditor is ‘forgiven’ and the debtor is no longer required to repay the amount owing. The ramifications for tax purposes can include the following:
• The treatment of losses in the hands of the debtor;
• The implications for the adjustable value of assets held by the debtor;
• The meaning of ‘debt forgiven’ in the context of Division 7A;
• The treatment of the loss forgone in the creditor’s accounts for tax purposes.
• What is the outcome if there is a balance remaining of the debt forgone when applied against the debtor’s tax attributes?
This webinar aims to provide the basis of understanding of the commercial debt forgiveness rules and their application to small and medium taxpayers funding their businesses by debt financing and reviews some of the implications for related party funding.
In particular, the webinar reviews the implications for succession planning where business owners are transferring their businesses to children and other related parties. The ATO has recently finalized guidance with regard to the meaning of forgiving debts in the context of ‘Natural Love and Affection’ which may have implications for family businesses transitioning to new owners.
Join us in this webinar as we discuss the foregoing in the on-going series of webinar presentations.
 
Presented by:Â Phillip London
Phillip London is the Tax Counsel at Tax and Super Australia. Phil’s background includes thirteen years in the ATO as well as tax advisory roles at KPMG, EY and most recently Crowe Australia. He has also worked in the UK on international tax matters. With a broad range of tax experience including personal and corporate tax issues, fringe benefits, and trusts, Phil will bring a great wealth of knowledge to our Tax Discussion Groups and Webinars.
