As wealthy families brace themselves for increased scrutiny from the Australian Taxation Office after June 30, one part of the family group structure is looking particularly vulnerable – companies falling foul of Division 7A.

This is the scenario I commonly see: decades ago, when mum and dad were establishing their first company or trust to start a business, the business was run on the smell of an oily rag and they never considered the possibility it would one day be wildly successful.