Division 7a Loans and Dividends

This course introduces students to Division 7a of the Income-tax Assessment Act (1936) which has significant effects on private companies operating within Australia wishing to take funds or assets from their business.

The course focuses on how the division operates and how and to who it is applicable, it also includes the tax consequences of the division and discusses some potential options to limit the effects on private companies and their shareholders.

The topics covered in the course are:

1. What is division 7a and why was it introduced
2. What will be treated as a dividend
3. Important sections of the division (excluding exceptions)
4. Exceptions to Division 7a Activating,
5. General Rules applicable to dividends declared under division 7a
6. Characteristics and Withholding Tax
7. Fringe Benefits
8. Loans Under Division 7a compared to a deemed dividend
9. Loans vs Payments
10. Distributable Surplus
11. Complying loans
12. Example
13. Things to avoid when making a loan under division 7a
14. Non-compliance
15. Approaches to division 7a (standard vs alternative)