Did the Company Loan Money to Shareholders? Yes, according to the company's records, there were transactions where the company paid for personal expenses of the shareholders using its bank account.
How Much Money was Involved? In the 2012 and 2013 income years, the company advanced $106,512 and $80,350 respectively to the shareholders, which the tax office treated as dividends.
What Did the Taxpayers Argue? The taxpayers claimed that some expenses paid by the company, like groceries, should be considered as payments for services, such as directors' fees. They suggested that a detailed review of all transactions should be done to determine the actual financial position of the shareholders.
What Did the Tribunal Decide? The tribunal disagreed with the taxpayers. They concluded that the payments made by the company for personal expenses were indeed loans, not payments for services. They noted that the company's records categorized these transactions as personal expenses, not payments for services. Therefore, these transactions were treated as loans, not fees or contributions.
If you have any questions, feel free to contact Tax Ideas Accountants & Advisers at
+61 2 83181545. You can also book an appointment through our live calendar.
- Topics on Division 7A (1) – Legislative background (1)
- Topics on Division 7A (2) – Legislative background (2)
- Topics on Division 7A (3) – Case Background (1)
- Topics on Division 7A (4) – Case Background (2)
- Topics on Division 7A (6) – Case Background (4)
- Topics on Division 7A (7) – Case Background (5)
