Menu

Tax Facts - Loans to Shareholders

Advances (or loans), including the forgiving of debts, made by a private company to a shareholder (or an associate of a shareholder) are automatically deemed to be dividends, unless they come within certain specified exclusions. The deemed dividend can only apply to the unpaid present entitlement to which the private company is entitled.

If the advances are converted to a loan before the due date of the company's income tax return, the advances will not be treated as a dividend. However, this loan must be written and have a maximum term and minimum interest rate.

There is also a requirement that the shareholder make minimum repayments on the loan. If the minimum repayments are not made, a deemed dividend will arise in relation to the shortfall.

tools

Client Tools

We offer a range of free, easy to use
online resources including:
Calculators | Key Dates
Tax Facts | Useful Links

 

publications

Publications

We have a range of resourceful
publications and documents
ready for download.

View Publications

 

contact

Contact Details

B: 26 Lewis Street, Port Lincoln SA 5606
P: PO Box 368, Port Lincoln SA 5606

T: (08) 8682 5222
F: (08) 8682 6938
E: info@26lewis.com.au