Johns father, Ken has a trust, the Barbie Family Trust, which owns several residential properties in Auckland. All the properties were bought in 2012. Ken is the settlor and trustee of the Barbie Family Trust and John and his sister are the beneficiaries of the trust. The trust is a complying trust and was set up 10 years ago. John and his friend Doreen own Milo Ltd (and only Doreen is an employee) with John holding 60% and Doreen 40%. Milo Ltd recently loaned $100,000 interest free to Barbie Family Trust.

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1.What is the tax implication of the interest free loan from Milo Ltd to Barbie Family Trust?

2.Is Milo Ltd associated with Barbie Family Trust for land transaction purposes?