What is the nature of the dividend taken to be paid?

Where a deemed dividend arises, an amount is required to be included in the assessable income of the shareholder (or their associate) as if it were an unfranked dividend. This amount is not taken to be paid by the private company however.

Further Information

For more information on when forgiven debts are treated as dividends refer to the fact sheet Division 7A - debt forgiveness.

End of further information

Where a deemed dividend arises under Division 7A in the 2001-02 or a later income year because of an honest mistake or inadvertent omission the Commissioner has the discretion to disregard the deemed dividend subject to conditions. Refer to the fact sheet Division 7A - exercise of Commissioner's discretion under section 109RB to disregard the operation of Division 7A or allow a deemed dividend to be franked.

End of attention
    Last modified: 06 Jul 2010QC 17636