High Court draws limits around UPEs as ‘loans’ in Bendel

Although the High Court has resolved the central issue in Bendel, the decision leaves open several important questions and areas of uncertainty, as highlighted by Kristie Schubert, Brent Murphy and Aylin Harapoz.

The High Court has handed down its decision in Commissioner of Taxation v Bendel [2026] HCA 18 (Bendel), rejecting the Commissioner's long-standing attempt to treat unpaid present entitlements (UPEs) as "loans" for the purposes of Division 7A. That is a significant outcome. But it is not the sweeping reset some early commentary suggests. Rather, what the Court has done is more precise, and in many respects more disciplined. It has confirmed that section 109D is not engaged merely because a c...

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Authors: Kristie Schubert, Brent Murphy,

Published Date: 27 July 2026