How Does Division 7A loan work
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- Опубликовано: 10 дек 2023
- It's important if you borrow money from your business you know how to pay it back or if a Division 7A loan applies. There are a set of rules you MUST comply with which the ATO are enforcing. Don't do it wrong - Penalties apply.
Thanks Derek. Could you please make a video on negative gearing, that would be much appreciated, thanks!
will do. anything in particular you would like discussed? derek
Hi Derek, at 14.59 you have mentioned that the Tax office will take away the credits for good, so the company's franking account will do down by the 33,333 franking credits?
Hi Derek, Thanks for the video. I have a query though. Say, for example, a director took a loan of $50,000 on 1 Jan 2021 and repaid it on 30 Sep 2021. He lodged his FY 21 tax return on 31 Dec 2021. Now, does the director needs to pay the interest for the loan from 1 July 2021 to 30 Sep 2021? or can we not charge any interest stating that the loan was repaid before tax lodgment date eventhough the loan was repaid after the end of financial year 2021.
Thanks for the video. If you are using the money from the company to offset your personal mortgage, isn't this giving you a fringe benefit on the interest savings?
there can be some FBT issues and i mentioned briefly FBT at 4.09, but most of the time this can be ignored under the otherwise deductible provisions. derek
@@TwelveAccounting Thanks Derek, I'm not even in your field but I enjoy the information regardless!
Thanks for the video. You mentioned that if you pay Div7A loan to the company, the interest is not deductible to you but is taxable to the company. Is it only when the money is used for private purposes? What if you buy shares or investment property ? If you borrow from the bank the interest will be deductible. Could you please clarify.
If the money was clearly borrowed from company for investment purposes, yes the interest would be tax deductible. derek