Deemed Dividends

 

Distributable Surplus

 

Div 7A Loans

 

Loan Agreements


Div 7A Interest Rates

 

 

 

Div 7A Loan Agreements

 

From 1 July 2006, Division 7A deemed dividend provisions will not apply to a loan where a loan agreement is in place between the company and the associated entity, and the following conditions are met:

 

  • The loan agreement is written and in standard form;

  • The agreement is signed and in effect before the company's tax return is due or lodged (whichever is first);

  • Minimum repayment is made before the company's tax return is due or lodged (whichever is first);

  • The loan term does not exceed 7 years for unsecured loans, or 25 years for loans secured by mortgage;

  • Minimum rate of interest is charged.

 

The information contained in this website is intended only as a guide, and should not be relied on to prepare a tax returns in accordance with Australian taxation law. It is recommended that professional advice is sought by a registered tax agent. The publishers accept no responsibility for errors, omissions or any damages caused by the improper use of this guide. Site maintained by Cremorne Partners.