ATO announces Div 7A assistance to allow taxpayers to request an extension of the repayment

The ATO has announced that taxpayers affected by COVID-19 will now be able to request an extension of the repayment period if they are unable to make their minimum yearly repayment by the end of the lender’s 2019-20 income year (generally Tuesday 30 June) on complying Div 7A loans.

Borrowers can request the extension by completing a streamlined online application. A separate form needs to be lodged for each amalgamated loan.

This streamlined process only applies to applications for an extension of up to 12 months under s 109RD of ITAA 1936 for borrowers affected by COVID-19. It is still open to a borrower to apply to obtain a longer extension of time outside the streamlined process under s 109RD or for relief on the grounds of undue hardship under s 109Q.