• Division 7A – benchmark interest rate

    Under Division 7A of Part III of the Income Tax Assessment Act 1936, the 'benchmark interest rate' for an income year is the 'Indicator Lending Rates – Bank variable housing loans interest rate'. This is the 'Housing loans; Banks; Variable; Standard; Owner-occupier' rate last published by the Reserve Bank of AustraliaExternal Link before the start of the income year.

    Benchmark interest rates

    These rates apply to private companies with an income year ending 30 June.

    A private company that meets certain requirements may adopt an income year ending at a date other than 30 June – a substituted accounting period. Those companies will need to determine the relevant rate.

    Year of income
    ended 30 June

    %

    Reference

    2018

    5.30

    TD 2017/17

    2017

    5.40

    TD 2016/11

    2016

    5.45

    TD 2015/15

    2015

    5.95

    TD 2014/20

    2014

    6.20

    TD 2013/17

    2013

    7.05

    TD 2012/15

    2012

    7.80

    TD 2011/20

    2011

    7.40

    TD 2010/18

    2010

    5.75

    TD 2009/16

    2009

    9.45

    TD 2008/19

    2008

    8.05

    TD 2007/23

    2007

    7.55

    TD 2006/45

    2006

    7.3

    TD 2005/31

    2005

    7.05

    TD 2004/28

    2004

    6.55

    TD 2003/19

    2003

    6.3

    TD 2002/15

    2002

    6.8

    TD 2001/20

    2001

    7.8

    TD 2001/1

    2000

    6.5

    TD 1999/39

    1999

    6.7

    TD 98/21

    Substituted accounting period

    If a private company has adopted a substituted accounting period, the applicable benchmark interest rate is the 'Housing loans; Banks; Variable; Standard; Owner-occupier' rate last published by the Reserve Bank of AustraliaExternal Link before the start of the private company's substituted accounting period.

    Examples

    Company ABC has a substituted accounting period starting on 1 October 2016. According to the RBA website, the last interest rate published before 1 October 2016 was for September 2016 and recorded to be 5.25%. Company ABC uses 5.25% as their benchmark interest rate for that income year.

    Company XYZ has a substituted accounting period starting on 1 April 2016. According to the RBA website, the last interest rate published before 1 April 2016 was for March 2016 and recorded to be 5.65%. Company XYZ uses 5.65% as their benchmark interest rate for that income year.

    End of example

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    Last modified: 01 Aug 2017QC 17928