Paying back Company loans

Yes. Firstly the issue is - Does the company have a distributable surplus in any of those years. A deemed dividend is limit to profit on that basis. Then there is a carve out. If an associate borrows and REPAYS the borrowing prior to the due lodgement date for the return all is forgiven. However there may still be a FBT issue if the rate does not comply with a minimum benchmark rate of interest. ie a zero rate loan may be a concern.

Oral arrangements are a problem. You can buy a online Div 7A agreement for little cost. However understanding it and calculating etc may pose a challenge. Its complex. No two cases are the same. Personal advice a must.

 

Or is just assessable income !! (That's the ATO view in many a audit) Anything that credits the company account can be income if its not adequately substantiated. (ie proceeds from private sale of a car could be taken to be ordinary company income if the company doesn't borrow it and there is nothing to support the origins etc.

 

There has been no distributable surplus in any of those years - hence me putting my own funds back into the business for extra cashflow.

But thanks for the reply, Paul.

I will have a discussion in detail about this with the accountant.

Cheers,

 

Yes, great point Paul