Document ID: chunk:federal_register_of_legislation:C2025C00014:section:109xa:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 109XA (pt 1/4)
Character Range: 977390–979981

109XA  Payments, loans and debt forgiveness by a trustee in favour of a shareholder etc. of a private company with an unpaid present entitlement

Payments
 (1) Section 109XB applies if:
 (a) a trustee makes a payment (including a payment through an interposed entity as described in section 109XF) to a shareholder or an associate of a shareholder of a private company (except a shareholder or associate that is a company) (the actual transaction); and
 (b) the payment is a discharge of or a reduction in a present entitlement of the shareholder or associate that is wholly or partly attributable to an amount that is an unrealised gain; and
 (c) either:
 (i) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee's return of income for the trust for the year of income of the trust in which the actual transaction takes place; or
 (ii) the company becomes presently entitled to an amount from the net income of the trust estate after the actual transaction takes place, but before the earlier of the due date for lodgment and the date of lodgment of the trustee's return of income for the trust for the year of income of the trust in which the actual transaction takes place, and the whole of the amount has not been paid to the company before the earlier of those dates.
Note: For entitlements through interposed trusts, see section 109XI.

Loan repayments
 (1A) Disregard paragraph (1)(b) if:
 (a) subsection (1) has previously applied because the trustee made a payment (the original transaction) to the shareholder, or to an associate of the shareholder, during a previous year of income; and
 (b) the shareholder, or an associate of the shareholder, makes a loan or loans to the trustee on or after 1 July 2009; and
 (c) either:
 (i) a reasonable person would conclude (having regard to all the circumstances) that at the time the original transaction took place the shareholder, or an associate of the shareholder, intended to make the loan or loans to the trustee; or
 (ii) the shareholder, or an associate of the shareholder, made the loan or loans to the trustee before the time the original transaction took place and a reasonable person would conclude (having regard to all the circumstances) that the trustee obtained the loan or loans in order to make the payment; and
 (d) the actual transaction is applied to repay all or a part of the loan or