What if the loan the interposed entity makes to the target entity is under a written agreement?

The written agreement under which the actual loan from the interposed entity to the target entity was made can be taken to be the agreement under which the deemed or notional loan was made.

If the written loan agreement satisfies certain criteria (complying loan agreement) the loan may be excluded from being treated as a dividend. See the fact sheet Division 7A - trust amounts treated as dividends - loans for details of the required loan criteria.

    Last modified: 15 Jul 2010QC 23183