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  • Division 7A calculator and decision tool

    About the tool

    The Division 7A calculator and decision tool has two main components to help you determine the effect of Division 7A in relation to payments, loans or debt forgiveness and how to meet your obligations on complying loans.

    See also:

    Decision tool

    This component will ask you a series of questions to help you determine whether a direct transaction by a private company to a shareholder or their associate (other than a private company) will be treated as an unfranked dividend (deemed dividend) in an income year.

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    Calculator

    If you have a complying loan agreement in place, this component will calculate the:

    • minimum yearly repayment required on a loan
    • interest payable to the lender for the income year
    • amount of the loan not repaid by the end of an income year (closing balance).

    Note:

    • You cannot use the calculator if the private company uses a substituted accounting period.
    • The amount of interest payable and the closing balance will only match obligations under your agreement if the interest payable under the agreement equals the benchmark interest rate.

    Information you will need

    To calculate the minimum yearly repayment you will need to know the:

    • income year in which the loan was made
    • amount of the loan not repaid by the end of the previous year of income
    • actual term of the loan
    • date and amount of any repayments attributable to that loan.

    Note:

    • The calculator is used to calculate minimum yearly repayments for years after the loan was made, up to the current year. It cannot calculate minimum yearly repayments for future years because the benchmark interest rate is not available until just before the end of an income year.

    When is the calculator updated?

    We generally update the calculator with the next benchmark interest rate by the end of June each year. The timing of this update relies on the Reserve Bank of AustraliaExternal Link publishing the relevant interest rate in early June of each year.

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    Last modified: 14 Jan 2016QC 21036