• When does a closely-held corporate limited partnership make a loan to a shareholder or associate?

    A loan is made to a shareholder or associate at the time the amount of the loan is paid to the shareholder or associate.

    A loan is treated as a dividend if:

    • a closely-held corporate limited partnership (treated as a company) makes the loan to you during the partnership's income year
    • the loan is not fully repaid before the partnership's 'lodgment day'
    • the loan is not an excluded loan
    • either you are treated as a shareholder or an associate of a shareholder of the company when the loan is made, or a reasonable person would conclude that the loan is made because you were a shareholder or associate at some time.

    A loan is not treated as a dividend if it is put under a qualifying written agreement before the partnership's 'lodgment day'. For more information on loans, refer to Division 7A - loans by private companies.

      Last modified: 15 Jul 2010QC 23184