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  • Forgiven debts treated as dividends

    Attention

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If a private company wholly or partly forgives a debt owed to it by a shareholder or associate, the amount forgiven will be treated as a dividend to the extent of the private company's distributable surplus at the end of its income year. This will not be the case if the debt has previously been treated as a deemed dividend.

    Last modified: 05 Dec 2006QC 16138