| Shareholder Loans |
| The Tax Office has released a Taxation Determination concerning certain deeming provisions in the shareholder loan rules. |
Broadly, where a trust has declared distributions to a private company and the distributions remain unpaid, the private company can be deemed to make a loan if the trust lends to certain related parties. The shareholder loan (deemed dividend) rules then apply.
Secondly, if the trust makes a loan to another entity, which in turn lends to a shareholder or associate, the loan can be deemed to be one made directly by the private company beneficially to its shareholder, in the Tax Office?s view.
These arrangements are quite complex. If you have a company or trust, then you need to be alert to the tax dangers of using funds for your own purposes.
22nd-July-2003 |
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