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Why do I need a Division 7A Loan?

A Division 7A Loan Agreement helps prevent unintended tax consequences when a private company lends money to shareholders or their associates. Without a compliant loan agreement in place, the ATO may treat the loan as an unfranked dividend, which could lead to unexpected tax liabilities. A properly structured Division 7A Loan ensures the loan remains compliant with tax laws, avoiding costly penalties.  

Set up your Division 7A Loan with ease

Create your Division 7A Loan Agreement quickly and confidently with our guided process. Designed to help you align with ATO requirements, this streamlined approach supports you in preparing a well-structured agreement – ready for execution and suitable for director approval.

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A Division 7A Loan Agreement helps prevent unidentified tax consequences when a private company lends money to shareholders or their associates.
 
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All pricing is GST inclusive
All pricing is ASIC fee inclusive

*Deed Stamping available for NSW and VIC for $66. Additional copy fee is $20 per copy for NSW and free of charge for VIC. Cost of Stamp Duty (NSW=$750, VIC=$200) not included in pricing.
**Deed stamping availabe only in NSW for $66. Additional copy fee is $20 per copy. Cost of Stamp Duty (NSW=$750, VIC=$200) not included in pricing.
+ Slimline – a presentation folder for easier filing, containing two hard copies of the documents.
++Binder – a high-quality binder containing three hard copies of the documents. Please refer to https://help.nowinfinity.com.au/hc/en-au/articles/360002058255-How-to-order-a-hard-copy-of-a-Document for more details

Frequently Asked Questions

Can a Division 7A Loan be repaid early?

Yes, the loan can be repaid early without penalties, as long as it meets minimum repayment requirements each year.

What are the key requirements of a Division 7A Loan?

The loan must be in writing, have a minimum interest rate set by the ATO, and follow the required repayment schedule to avoid tax penalties.

What happens if I don’t have a Division 7A Loan Agreement?

If no agreement is in place, or the terms are not met, the ATO may treat the loan as an unfranked dividend, which can result in additional tax liabilities. 

What is a Division 7A Loan?

A Division 7A Loan is a loan agreement that ensures money borrowed from a private company by shareholders or their associates is structured correctly to avoid it being treated as an unfranked dividend. 

Who needs to sign the Division 7A Loan Agreement?

The borrower (shareholder or associate) and an authorised representative of the company must sign the agreement? 

Why is a Division 7A Loan Agreement necessary?

Without a compliant loan agreement, the ATO may classify the loan as an unfranked dividend, leading to higher personal tax liabilities for the borrower. 

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