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The smsf that I am auditing has an investment in a related party unit trust (not pre-99). It is the only investment of the fund other than the bank account. The other party is the family trust. On the balance sheet it appears that the family trust has withdrawn more funds as drawings from the unit trust on top of their distributions i.e., there is an asset account in their name. My query is - would this be considered a loan to another entity under 13.22C? Any advice would be greatly appreciated.
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I agree with SMSF AAA. I just wanted to suggest, that if the primary asset of the unit trust is a property, that you check the "loan amount" hasn't occurred due to a failure to conduct tax effect accounting correctly. I frequently see related trusts with "loan accounts" caused by the unit trust claiming deprecation and the full proceeds of the profit being paid to the unit holders.