With a TaxPlan Advanced subscription you can now create the current and recommended scenarios to include in a Div7A Loan client advice report. Here's how:
Watch this video to understand the impact of the Div 7A interest rate increase and learn strategies to eliminate loans efficiently.
Step by Step Guidelines
Prepare Calculations
Download the Div7A Workpaper to model the Div7A interest rate increase effect to your clients.
Inform
To initiate conversations with your clients, use the Value Plan Price client email template to offer this service.
Prepare the Client Advice Report in TaxPlan
- Create a new TaxPlan and add the client group (from XPM or manually)
- Create a Base Scenario
- For this scenario add the following example description (click the Pencil icon to edit):
This scenario includes your annual minimum repayments for a Division 7A Loan with a starting balance of $XX,XXX from the Bucket Company to [add name] .
- For this scenario add the following example description (click the Pencil icon to edit):
- Copy the Base to create a new Recommended Accelerated Payments Scenario where additional payments are made to reduce the loan
- For the Accelerated Payments Scenario - add the following description (click the Pencil icon to edit):
This scenario includes a larger Dividend of $XX,XXX to [add name] so he can make accelerated payments to reduce the Division 7A Loan faster, and therefore reduce non tax-deductable interest charged.
- For the Accelerated Payments Scenario - add the following description (click the Pencil icon to edit):
- Download the advice report from the Reports modal (available to TaxPlan Advanced subscribers)
- The summary of the Base and Recommended Scenario will be automatically included.
- Further personalise the advice report as indicated in red text.
- Save to you Document Management System and send to your your client.
Follow up with client with following:
- Prepare a Dividend Statement?
- Plan for larger annual minimum repayments?
- Pay off loan from other funds?