The High Court is expected to hand down its decision in Commissioner of Taxation v Bendel at any time.

This case considers whether unpaid present entitlements (UPEs) can be treated as loans under Division 7A — an issue with significant implications for private groups, trust structures and historical arrangements.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Archana Manapakkam from Velocity Legal’s Tax team to unpack what we know so far, how the law currently operates, and what the potential outcomes could mean for taxpayers.

The discussion covers:

• The Division 7A framework and how it applies to private groups• The ATO’s current position on UPEs under TD 2022/11• The Full Federal Court decision in Bendel and its reasoning• What the High Court is being asked to decide• How the ATO is approaching audits and objections pending the outcome• Practical considerations for taxpayers and advisers

A timely episode for business owners, accountants and advisers navigating Division 7A risk while awaiting the High Court’s decision.

For advice on Division 7A, trust distributions or ATO engagement, contact Velocity Legal’s Tax team.