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  • Companies are full of tax traps.
  • When you see a red flag, research the problem or call for help.

Division 7A of the Income Tax Assessment Act 1936 is a poisonous well of hissing snakes for general practitioners when dealing with companies. In very broad and simple terms, it can claim income tax on amounts paid to, or loaned to, or debts forgiven from, shareholders or related individuals or entities.

The following examples are simplistic and there are many qualifications and exceptions, but each one carries a bright red flag.

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