What is the value of a payment arising from the provision of an asset for use?
If the payment is the provision of the use of an asset not involving the transfer of property, the amount of the dividend is the amount that would have been paid for the provision of the asset by parties dealing at arm's length less any amounts actually paid. The amount of the payment is nil if the amounts paid equal or exceed the amount that would have been paid by parties dealing at arm's length.
Matt is a shareholder of a private company that owns a holiday home. In the 2009-10 income year, Matt uses the holiday home for one week for which he pays the company 50% less than the market value rent for the property. The market value rent for the property is $1,000 a week. The company has therefore made a payment to Matt of $500, which will be assessable to Matt under Division 7A, subject to the company having a distributable surplus.