Can an ("undocumented") "at call" loan to a Company from a director (at zero percent interest) be repaid in part by purchases for the Companies director from the Companies (sole) bank account without "triggering" Fringe Benefits Tax or Division 7A?
Is such a loan counted towards "net capital gain" for the Company if it takes more than one financial year to repay?
Howdy @kind1,
If the company makes purchases for the director using the company’s bank account, this could be considered a fringe benefit. However, loans to shareholders or their associates (like directors) are generally not subject to FBT if they fall under Division 7A.
This provision applies to loans made by private companies to shareholders or their associates.
If the loan is
It could be treated as a deemed dividend.
To avoid this, ensure the loan is either repaid or converted into a complying loan agreement with minimum yearly repayments.
If the loan is:
Howdy @kind1,
If the company makes purchases for the director using the company’s bank account, this could be considered a fringe benefit. However, loans to shareholders or their associates (like directors) are generally not subject to FBT if they fall under Division 7A.
This provision applies to loans made by private companies to shareholders or their associates.
If the loan is
It could be treated as a deemed dividend.
To avoid this, ensure the loan is either repaid or converted into a complying loan agreement with minimum yearly repayments.
If the loan is:
But can (uncomplying) ("undocumented") "at call" Division 7A loans from the Companies director (at zero percent interest) be repaid in part by purchases for the Companies director from the Companies (sole) bank account?
15 Apr 2026 · 4 min read time
16 July 2025 · 5 min read time
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