A friend’s accountant suggested that they could reduce interest on non-deductible debt by using company cash to offset their personal
mortgage, then transferring the cash back by 30 June. Is this an acceptable strategy?
This might initially sound like a brilliant strategy but what is really happening is that you are using company funds to derive a personal
benefit. Doing this once might not attract attention, but doing this more than once might trigger a deemed unfranked dividend under Division
7A. Section 109R is designed for scenarios like this.
If this occurs, the repayment you made will be ignored, meaning that a deemed dividend could be triggered in relation to the funds
initially borrowed from the company unless a complying loan agreement is put in place, in which case minimum loan repayments would need
to be made to prevent a deemed dividend from arising.
For example, let's assume you are a shareholder of the company (or an associate of a shareholder) and you borrow money from the company on 1
July 2022. This loan would generally fall within the scope of Division 7A, but a deemed dividend can be avoided if the loan is fully repaid
by the earlier of the due date and actual lodgement date of the company's 2023 tax return.
However, if you repay the loan but it appears that you intend to borrow a similar or larger amount from the company when making the
repayment then the repayment can be ignored. The main exception to this is where the repayment is made in a way that is taxable to the
individual (e.g., dividends or directors’ fees are set-off against the loan balance).
One of the most common situations where section 109R could apply is where funds are taken from the company bank account and placed into a
director's home loan offset account.
Even if the funds are transferred back to the company before the end of the year, there is a significant risk of section 109R applying if the pattern repeats. That is, the money will be treated as a dividend and taxed as assessable income.
Give us a call or email if you'd like help to understand what this means for you and your business.
Understanding and effectively managing excise tax is crucial for the success of distilleries and craft alcohol producers in Australia. With proper planning and strategic execution, businesses can thrive in this heavily regulated yet dynamic market.
Even amidst loss, there are ways to secure a strong financial future for your loved ones. Our advisers are here to help you create a resilient plan with tools like education bonds, ensuring your family's needs are met today and for years to come.
As countries around the world isolate from globalisation, we’re seeing an increasingly fragmented global economy.
With inflation coming off the boil, there was optimism that borrowing costs have peaked and could be lowered later this year. In turn, this could be beneficial for corporate earnings.
Building on the findings from Xero Small Business Insights (XSBI) report, Small business productivity: Trends, implications and strategies, this special report presents industry and regional labour productivity data for small businesses.
Property prices continue to go from strength to strength with new data showing values are once again reaching record highs.
Inflation in Australia is still elevated at 3.6 per cent, managing on a single income is tougher than ever.
The main residence exemption exempts your family home from capital gains tax (CGT) when you dispose of it.
Cost of living pressures is seeing an increasing number of Australians headed for an easier life in regional suburbs.
In this podcast, we talk with Mick Simmons, founder of Mental Health Safety Net, a grass-roots organisation that provides suicide awareness training to workplaces and schools. Trigger Warning: This episode has content related to suicide and mental health issues.
Equipment loans are an important financial tool that allows businesses to acquire the necessary machinery and tools without straining their cash flow.
It’s essential that any income earned from sharing economy platforms such as Airbnb, Stayz, Uber, etc., is declared in your tax return.
Legislation increasing the instant asset write-off threshold from $1,000 to $20,000 for the 2024 income year.
As tensions between Australia’s largest companies, their customers, and the federal government flare, companies such as Woolworths, AMP, and Qantas are placing a higher priority on measuring their community reputation.
Australia has become an expensive place to live, so it’s not surprising that the lure to retire at an idyllic, low-cost, offshore location is getting a lot of attention. We discuss the pros and cons.
Will 2024-25 be another year of volatility or a return to stability?
The traditional office is getting a shake-up as landlords are being forced to adapt to new working environments.
In 2023, a 37-year-old mother of two, insured under a life insurance policy, passed away unexpectedly. The life insurance policy provided for her family by covering the mortgage and setting aside funds for her children's private school education.
Investors continue to seek out caravan parks, after a resurgence in the sector during the lockdown years.
We are thrilled to announce that Daniel McCulloch has been promoted to Partner at Smart Business Solutions Group. His promotion to Partner is a testament to his hard work, dedication, and the high level of service he consistently delivers.
Australia has become an expensive place to live, so it’s not surprising that the lure to retire at an idyllic, low-cost, offshore location is getting a lot of attention. We discuss the pros and cons.
Winter deals can help you find a caravan within your price range without compromising on quality.
The End of Financial Year (EOFY) can be a great time if you’re in the market for a new car.
As the EOFY approaches, property investors need to be proactive to ensure they are in the best position to negotiate tax time.
The industrial sector is currently experiencing limited supply and high demand as the population grows.
Using various forms of finance is a viable strategy to ensure you start the new financial year with strong cash flow.
It’s time to take control of your time. It’s time to stop being ‘busy’ and start being ‘productive’. It’s time to learn how to invest your time to create your best life. Kate Christie has taught time to thousands of professionals and business owners around the world – exactly how to find hours of extra time and then design their best lives. What would 30 extra hours a month mean to you?
We are thrilled to announce that SMART Business Solutions Group has been awarded the prestigious Multiservice Firm of the Year at the 2024 Australian Accounting Awards! This recognition is a testament to our commitment to excellence, innovation, and the comprehensive range of services we provide to our valued clients.
Heather Gallagher has spearheaded transformative initiatives in the mortgage broker space through her role as Head of Training and Education at outsource Financial. She has been instrumental in empowering brokers and administrative staff through tailored mentoring programs and weekly learning sessions.
One of the main considerations when applying for a car loan as a casual worker is your income.
Property prices could be about to climb higher with new analysis predicting the major capital cities will see significant growth in the next three years.
Property prices have hit yet another record, with capital city house prices rising by 1 percent.
Accommodation payments (called Refundable Accommodation Deposits – RADs for short) are one of the most misunderstood areas of residential
aged care. Many people don’t realise that a RAD is not “lost” money but is refundable when you leave care or pass away.
Creating equity isn’t always about spending time in the market. You can also manufacture equity if you buy well and implement some proven strategies.
This year’s Federal Budget focussed on the rising costs of living and how to help Australians manage. Before the Budget there was speculation that we would see changes for aged care funding and fees, but what made it into the Budget?
RADs, DAPs, MPIRs, MTAs and ACATs !! These are just a few of the acronyms you will face when navigating aged care decisions. It might even feel like you’ve landed in a foreign country where you don’t understand the language or the rules.
Explore the world of self-managed superannuation funds (SMSFs) with expert Shannon Smit as she shares insights on wealth-building, retirement planning, and investment strategies using super as a vehicle.
Your credit score is a track record of how you manage debts.
Before getting into the specifics of property division, it's important to understand the concept of legal ownership.
Close The Dream Gap. Starting at age 5, many girls begin to develop limiting self-beliefs. They stop believing their gender can do or be anything. This is the Dream Gap.
Asset leasing provides businesses with several advantages, an attractive option for acquiring essential equipment and machinery.
New warehouses on the back of rising interest rates, new construction is expected to rebound as tenant pre-commitments firm up and demand rises.
Despite electric vehicles growing in popularity there is still a need for traditional service stations, according to an expert.
It’s important to initiate transparent communication with tenants well in advance of listing the property for sale.
Budget 2024-25 is a pre-election budget for the people with everyone getting a little something to ease cost of living pressures. For business, there is the extension of the $20k instant asset write-off again.
Secured business loans play an important role in supporting small business owners.
Secured business loans play an important role in supporting small business owners.
Join Shannon Smit as she interviews Sharyn McClafferty, CEO of Slipstream Group, in a podcast episode discussing leadership, team growth, and the value of continuous learning and development for business success.
The Federal Budget, delivered on the night of May 12 2026, was one of the most significant in years. We know you will have questions — and we have put together this document to answer the ones we are hearing most.
The 2026–27 Federal Budget brings major changes to CGT, negative gearing, trusts and super. Find out what it means for you and your business.
.jpg)
.png)
.png)
