We’ve now published a Decision impact statement (DIS) in response to the High Court’s decision in Commissioner of Taxation v Bendel [2026] HCA 18External Link (Bendel case).
The DIS provides taxpayers and advisers with guidance to inform their decisions about trust distributions and the operation of Division 7A before the end of this financial year.
The DIS explains that the effect of the High Court's decision is that no loan will arise for the purposes of Division 7A where a private company beneficiary does nothing in respect of its entitlement to income from a trust. However, any dealing with those funds that amounts to either a payment or loan to, or forgiveness of a debt of, a shareholder of that corporate beneficiary or their associate, may attract the operation of the rules on unpaid present entitlements in Subdivision EA.
Further, if the entitlement arose from a reimbursement agreement, the integrity measure in Section 100A may apply to tax the trustee at the top marginal rate.
If you're potentially affected by the decision in the Bendel case, we encourage you to read the DIS and consult with your adviser.
The DIS is open for comment until 24 July. Refer to the contact details in the DIS.
We're currently reviewing our guidance products in light of the High Court's decision. We may issue further guidance to ensure the correct application of Division 7A.
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