Request to extend time to make minimum yearly repayments for COVID-19 affected borrowers under section 109RD

ATO issued an update to its website entitled “Request to extend time to make minimum yearly repayments for COVID-19 affected borrowers under section 109RD”.

This announcement relates to the inability of borrowers under Division 7A loan agreements to make the minimum yearly repayment required by 30 June 2020. The announcement provides a procedure whereby a borrower who is unable to make repayments on a Division 7A loan, to request an extension of time to make the minimum yearly repayment under section 109RD of the Income Tax Assessment Act 1936.

Here is a link to the announcement:
https://www.ato.gov.au/Forms/Request-to-extend-time-to-make-minimum-yearly-repayments-for-COVID-19-affected-borrowers-under-section-109RD/

The announcement provides a form that can be downloaded from the above website that requests the extension of time to make the minimum yearly repayment. If approved, the extension of time will be until 30 June 2021.

The announcement does not say that the application must be made by 30 June 2020. However, it does say that no response will be received from the ATO until after the end of the 30 June 2020 tax year of the lender. The information states that a person can expect a response within five business days of lodging the application form. A separate form must be lodged for each loan.

Division 7A latest interest rate – 5.37% reduce to 4.52%

https://www.ato.gov.au/Rates/Division-7A—benchmark-interest-rate/

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