The Commissioner has acknowledged that, as a result of the COVID-19 situation, shareholders who have taken loans from a company may be unable to pay the required minimum yearly repayment required under Division 7A.
To help in this situation the Commissioner has indicated he will allow an extension of the repayment period for those borrowers who are unable to make their minimum yearly repayment by the end of the lender’s 2020/21 income year.
This is the same extension that was provided for the 2019/20 income year.
Borrowers can request the extension to make the repayments by 30 June 2022 rather than by 30 June 2021 by completing an online application that asks what is the shortfall amount, that the COVID-19 situation has affected them and that they are unable to pay as a result.
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