Private Company Loans

Back to front page

The Tax Office has released a Taxation Determination stating the essential information that a written loan agreement between a private company and its shareholder (or their associate) must include:

the name of the parties;
the loan terms;
a statement that the parties have agreed to the terms; and
the date when the agreement was executed.

If a private company extends a loan to its shareholder (or their associate), the loan may be deemed as an unfranked dividend, which is assessable income to the shareholder (or their associate) in the year the loan arises.

However, if a loan agreement is in place, an exception applies.

Back to front page

Please contact our nearest office if you would like more information on this topic.

Bentleys Chartered Accountants and Business Advisors has offices in:

Australian capital cities Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra

Regional and suburban Dubbo, Gosford, Ipswich, Maroochydore, Newcastle, Tamworth

This publication is provided to you by Bentleys Australia Pty Ltd (Bentleys) on a complimentary basis. The information provided is a general guide only and Bentleys accepts no responsibility for the accuracy of the information or opinions contained herein. The contents do not constitute business, accounting, taxation or financial advice and should not be relied upon as such.

Bentleys is a national association of independent accounting firms in Australia. The member firms of the Bentleys association are affiliated only and not in partnership.
Bentleys participates in the Praxity AISBL International Alliance of accounting firms.

Liability limited by a scheme approved under Professional Standards Legislation.