A Division 7A dividend in the Australian tax system is an amount treated by the Australian Tax Office (ATO) as an assessable dividend of a shareholder of a private company that attempts to make a tax-free distributions of profits to the shareholder, or an associate of the shareholder.
Division 7A applies to payments, loans and debts forgiven on or after 4 December 1997. However, it may also apply to loans in place before this date, where the amount of the loan is increased or its term extended on or after 4 December 1997. Division 7A applies to debts forgiven on or after 4 December 1997, regardless of when the debt was created.
Read more about Division 7A Dividend: Objective, Amounts Caught, Limitations, Later Dividends, Who Is An Associate?, Qualifying Commercial Loans
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