K Pty Ltd and M Pty Ltd Agreed to Prepare

K Pty Ltd and M Pty Ltd agreed to prepare loan documentation under which K Pty Ltd agreed to repay certain interest on a loan. The parties did not intend the documents to give rise to actual transactions and no amounts of interest (pre-paid or not) were ever paid on the loan. How would this arrangement, under which interest was purported to be paid, be best described for tax purposes?

A) Tax evasion
B) Tax avoidance
C) Tax planning
D) A sham