Tax issues when forgiving debts
Recorded 25 September 2025. Navigating the tax rules for both parties when debts are forgiven.
When the lender can claim deductions or a capital loss
Step-by-step guide to managing the tax issues for the borrower
Navigating Division 7A, FBT and GST issues
Recorded 25 September 2025
When economic conditions become more challenging, it is increasingly common for debts to be forgiven and practitioners will often be called upon to provide advice in this area. This essential webinar navigates the tax rules for both the lender and the borrower when debts are waived or forgiven or are left outstanding for an extended period of time.
Clients who have waived or forgiven debts owed by other parties normally assume that they can claim a tax deduction or capital loss, but this isn’t always the case. The Tax issues when forgiving debts webinar looks at the conditions that need to be satisfied for the creditor to access tax relief for the genuine economic loss that they have suffered.
From the borrower’s perspective, we look at when a forgiven debt needs to be included in assessable income and the complex tax implications that can potentially arise under the commercial debt forgiveness rules.
There are often other tax consequences that need to be considered when debts are being waived or forgiven. We look at when GST adjustments arise, Division 7A issues on shareholder loans and FBT issues on employee loans.
Total 1.25 CPD Hours
This practical webinar covers:
- When creditors can claim bad debt deductions and the steps that need to be taken
- Exploring the common issues for a lender when forgiving loans and claiming capital losses
- Tax consequences when writing off an unpaid trust distribution
- Understanding when a forgiven debt can become assessable to the borrower
- Navigating the complex commercial debt forgiveness rules and how these rules impact the borrower
- Working through the Division 7A and FBT provisions when shareholders and employees are involved
- How to deal with the GST adjustments for both parties
Michael Carruthers
Tax Director, Knowledge Shop
Michael is an adviser, author, in demand presenter, mentor to Knowledge Shop’s technical team, and is well known for his capacity to translate highly technical information into tangible and useable advice for the profession. He has a knack for seeing through the complexity and helping advisers work through highly technical issues with certainty and accuracy.
Michael works with advisers every day to help them negotiate and implement the constant tide of change impacting the industry. He was a long-term member of the advisory panel for the Board of Taxation and was a member of the reference group for the Board’s review of small business concessions.
He was also an expert panel member for the Board’s review of tax impediments facing small business.
Tax issues when forgiving debts
Tax & Accounting
1.25 hours | 1 modules
Investment per person:
$213.64
+ GST
Team cost:
$540.91
+ GST
You can’t use team rate, please either signup or login to access team rates
CPD Hours: 1.25 hrs
FS
SMSF
Tax Accounting
General