Perks- Focussed, Client-driven Accounting & Financial Services Firm in South Australia & Northern Territory

Budget 2008-09: Division 7A Interest Rate

14.08.08

The Tax Office has stated that the benchmark interest rate for the 2008-09 income year for the purpose of calculating the interest component of a loan from a private company to its shareholders (or their associates) is 9.45%.

The tax laws contain provisions that allow loans by a private company to its shareholders (or their associates) not to be treated as an unfranked dividend if the loan is made under a written agreement. One of the requirements of the agreements is that the interest rate to be used in calculating the interest payable on the loan for a financial year must equal or exceed the benchmark interest rate for that financial year.

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