The extension can be requested by completing a streamlined online application. As part of this process the ATO will require the borrower to confirm the shortfall amount, that the COVID-19 situation has affected them and that they are unable to pay their Division 7A annual minimum repayment as a result. If the application is approved, the ATO will advise the borrower that they will not be considered to have received an unfranked dividend. This is subject to the shortfall being paid by 30 June 2022.
This is similar to the extension which was made available for minimum repayments that could not be made by the end of the 2019–2020 income year. If a taxpayer obtained the extension last year, they must make up the shortfall of the 2019–2020 minimum repayment by 30 June 2021.
If a taxpayer does not meet this deadline, they will need to either obtain a further extension of time for the 2019-2020 minimum repayments outside the streamlined process (i.e., by contacting the ATO) or amend their 2019-2020 tax return to include a dividend.