• Can a loan be made under a written agreement so that Division 7A will not apply?

    Yes, if the written loan agreement meets the minimum interest rate and maximum term criteria explained in the fact sheet Division 7A - loans by private companies under the heading 'Loans made under written agreement', then Division 7A will not apply for that loan for the income year.

    In subsequent income years Division 7A will not apply so long as the required 'minimum yearly repayment' is made.

    Attention

    The written agreement must be between the trustee and the shareholder (or shareholder's associate).

    End of attention
    Further Information

    See also the fact sheet Division 7A - loans by private companies for an explanation of the required 'minimum yearly repayment' and the other amalgamated loan rules.

    End of further information
      Last modified: 18 Aug 2010QC 17634