Tag Archives: Division 7A

Debt forgiveness due to love and affection

Private companies that pay amounts of money, make loans, or forgives debts of shareholders or associates of shareholders, may be subject to Div 7A rules which are designed to ensure that income is not inappropriately sheltered at the corporate tax rate. Generally, these rules deem certain moneys and/or benefits (eg loans and forgiven debts) obtained from...
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Deemed Dividend Rules: New 10 year loan model

Division 7A is a long-standing tax integrity measure that treats certain payments by private companies to shareholders or their associates as unfranked "dividends" for tax purposes. Those deemed dividends are then assessable income of the recipient and taxed at the recipient's marginal tax rate.

Current laws include an important exception to these rules:...

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Deemed Dividends: Changes Are Coming

If you own a private company, deemed dividend payments or Div 7A may be familiar to you. In short, it is designed to ensure that income is not inappropriately sheltered in corporate structures at the corporate tax rate. It usually applies when a private company provides a benefit to a shareholder (or their associate), and...

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