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Deemed dividends

Last updated 29 March 2021

Payments made to a CGT concession stakeholder who is an employee, to satisfy the retirement exemption requirements, are not deemed to be in consequence of termination of employment for the purposes of section 109 of the ITAA 1936 (about excessive payments to shareholders, directors and associates being deemed to be dividends).

Division 7A of the ITAA 1936 also does not apply to treat such payments made by a company or trust as dividends.

Payments made to satisfy the retirement exemption requirements are not treated as a dividend nor a frankable distribution provided you are:

  • a company making a payment to      
  • an interposed entity receiving a payment and passing that payment on.

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Interposed entities receiving or making payments

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