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Division 7A loan repayments: Part 1

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Published on 01 Oct 20 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

Almost all minimum annual repayments under complying Div 7A loan agreements are made without transferring money. They are typically made by way of set-off against a dividend declared by the company, or purportedly made via a round-robin of payments. Part 1 of this article addresses the requirements to make a legally effective repayment by way of set-off. Where a repayment is not effective, the minimum annual repayment has not in fact been made, resulting in a deemed dividend.

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David Montani CTA
David Montani, CTA, is National Head of Technical Tax – Private Enterprise at Grant Thornton. He has over 30 years’ experience, with over 20 of those in specialist tax advisory. In his role with GT, David delivers practical tax training, mentors staff, provides tax technical support on significant client engagements, and assists with quality and excellence protocols. - Current at 13 November 2025
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