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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.

Author profile

David Montani CTA
David Montani, CTA, is National Head of Technical Tax – Private Enterprise at Grant Thornton. He has over 30 years’ experience in specialist tax advisory, and is the author of Tax Wars: The bluster, bulldust and bedlam behind Australia’s tax reform gridlock. - Current at 13 April 2026
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