• When does a failure to make a minimum yearly repayment on an amalgamated loan cause the balance of the amalgamated loan to be treated as a dividend?

    For income years prior to the 2006-07 year, the balance of the amalgamated loan may be treated as a dividend, subject to the private company's distributable surplus, if:

    • a private company made an amalgamated loan to you in an earlier year of income
    • the amalgamated loan is not repaid at the end of the current year
    • the current year is the first year that the amount paid to the private company during the current year for the amalgamated loan falls short of the minimum yearly repayment for the current year
    • the Commissioner does not exercise a discretion not to treat the amount as a dividend (see Commissioner's discretion not to treat an amalgamated loan as a dividend).
      Last modified: 27 Jul 2016QC 17341