I am the sole director of a Pty Ltd (private company).
During FY21 the company made two loans to me, amalgamated into one loan 'FY21 Director's Loan' totalling $50,000.
I have not yet lodged the FY21 income tax return for the company, due date is 22 May 2022 so let's assume I'll lodge on 01 May 2022.
The complying Division 7A loan agreement will be drawn up and signed prior to 01 May 2022 i.e. prior to lodgement of the company's income tax return. This is an unsecured loan so the term is 7 years.
Questions:
1 - when is the first repayment (principal plus interest as per benchmark interest rate) due? My accountant is telling me that the first repayment on the loan (loan made during FY21) is due PRIOR to the FY21 income tax return being lodged - is this correct? This has me confused as the ATO website says interest is only due from 01 July 2021 (i.e. FY22) so why would the first repayment be due prior to submitting the FY21 income tax return?
2 - does it make a difference when the repayment (principal plus interest) is due if I am actually paying the repayment back in cash or if it's paid as a dividend (with no cash transfer)? I.e. does the repayment method influence when the repayment is due?
Thank you so much!
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