What this Practice Statement is about
Exercising the discretion on behalf of the Commissioner
When to consider the discretion
Prerequisite for the discretion to be considered
Steps after identifying that the prerequisites are met
Whether Division 7A was triggered because of an honest mistake or inadvertent omission
If there is insufficient evidence to establish the cause of the trigger
Mistakes and omissions that may result in Division 7A being triggered
Mistake or omission examples
Facts and circumstances to take into account in determining whether a mistake was honest or an omission inadvertent
Relevant facts and circumstances that support honest mistake or inadvertent omission
Relevant facts and circumstances that weigh against honest mistake or inadvertent omission
If the transaction was intended to avoid the application of Division 7A
If the entity has relied on professional advice
If the entity has not obtained professional advice
If the trigger is the result of a lack of knowledge of Division 7A
If the trigger for Division 7A was a common kind of mistake or practice
Evidence to consider
How to deal with undocumented assertions
If there is incomplete or conflicting evidence
Whether to exercise the Commissioner's discretion
Considerations in making a decision whether to exercise the discretion
Circumstances in which the mistake or omission was made
Extent of corrective action and when it should be taken
Instances where Division 7A has been triggered previously
Any other relevant matters
Making a decision to either disregard a deemed dividend or allow it to be franked
Factors to consider when disregarding the dividend or allowing it to be franked
Whether to exercise the discretion subject to a condition
A reasonable time to require the corrective action be taken
Review rights in respect of a decision made under section 109RB
Whether to refer the tax agent to the Tax Practitioners Board
More information