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Proposed Division 7A changes
In the 2016-17 Federal Budget, the Government announced targeted amendments to Division 7A. A single 10 year loan model will be used instead of the existing 25 year and 7 year loans. The interest rate will also be revised to the RBA overdraft rate for small business which is usually 2% higher than the current benchmark rate.
The amendments were to apply from 1 July 2019 but has since been postponed (to, it seems, 2022) to the income year commencing on or after date of royal assent of the enabling legislation. There will also be further consultation on safe harbour rules, loan duration and minimum interest rate and measures to improve integrity.
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