ato logo
Search Suggestion:

Payments and other benefits not affected

Certain payments and other benefits are specifically excluded from being treated as Division 7A dividends.

Last updated 13 May 2015

The following payments and other benefits are not treated as Division 7A dividends:

  • loans and other payments repaid before company's lodgment day for the year in which the payment or loan occurred
  • amounts that are treated as assessable income or excluded from being assessable income under another provision of the income tax law
  • payments that discharge an obligation of the private company to pay money that are consistent with the two parties dealing at arm’s length
  • complying loans for the purpose of Division 7A
  • payments that are converted to complying loans for the purpose of Division 7A before the private company's lodgment day
  • loans made by the private company in the ordinary course of its business on the usual terms it makes similar loans to parties at arm's length
  • payments (but not loans or debts forgiven) to shareholders or their associates in their capacity as an employee – Fringe benefits tax (FBT) may apply instead of Division 7A (see Division 7A and fringe benefits tax)
  • loans solely for the purpose of enabling the shareholder or their associate to acquire certain shares or rights in the company under an employee share scheme
  • payments or loans to shareholders or their associates that are companies except where the company shareholder or associate is trustee of a trust
  • certain retirement exemption payments
  • a distribution by a liquidator in the course of winding-up a company
  • minor use of a company asset – where the value of the use is under $300
  • otherwise deductible usage – that is, had the shareholder or their associate paid for the use of the asset they could have claimed the cost as an income tax deduction
  • the use of certain residences.

Next

QC45059