Division 7A tax advice

Protect your accumulated company profits from unexpected Division 7A tax consequences.

Division 7A is one of the most common sources of unexpected tax bills for private company owners in Australia. When a shareholder or associate borrows money from a company, uses company assets, or receives payments that are not properly documented, the ATO can deem these to be unfranked dividends – taxable at the recipient’s marginal rate. The consequences can be severe and retroactive. ADLV Law helps you understand your Division 7A exposure, fix problems before the ATO finds them, and implement compliant structures going forward.

Division 7A tax advice

ADLV Law will review your company structure, identify Division 7A risks, and implement compliant strategies to access your profits without triggering deemed dividends.

What is Division 7A and who does it apply to?

Division 7A of the Income Tax Assessment Act 1936 prevents private company profits from being distributed to shareholders or their associates tax-free through loans, payments, or use of company assets. If a payment or loan is not properly documented and structured, it can be treated as an unfranked dividend and taxed at the recipient’s marginal rate.

What triggers a Division 7A deemed dividend?

A deemed dividend can be triggered by a loan from a private company to a shareholder or associate without a compliant loan agreement, the use of company assets by a shareholder or associate without adequate payment, or a company’s forgiveness of a debt owed by a shareholder or associate. The ATO also examines indirect loans and payments made through other entities connected to the company.

What are the requirements for a compliant Division 7A loan agreement?

A compliant Division 7A loan agreement must be in writing, signed before the lodgement date of the company’s tax return for the year the loan was made, specify an interest rate at least equal to the ATO’s benchmark rate for that year, and require minimum yearly repayments that amortise the loan over the permitted term – 7 years for unsecured loans and 25 years for loans secured by a registered mortgage over real property.

Can Division 7A problems be fixed after they arise?

Yes, in many cases – but it is significantly more expensive and complicated than preventing the problem in the first place. Where loans exist without proper documentation, it may be possible to put compliant agreements in place before the company’s return is lodged. Where deemed dividends have already been assessed, we can advise on objections, amended assessments, or restructuring options. The ATO also has limited concessions for inadvertent breaches in certain circumstances.

Avoid deemed dividend traps

Optimise access to profits

Long-term tax efficiency

Get Division 7A clarity today.

Book a consultation with our experienced tax lawyers to review your Division 7A position and develop a compliant strategy for accessing your company profits.

Are your company profits trapped by Division 7A?

You have substantial profits accumulated in your company, but accessing them in a way that is efficient and compliant is complex. Division 7A can turn loans, payments, and the use of company assets into unfranked dividends taxable at your marginal rate – and the ATO actively reviews private company arrangements to find exactly these problems.

We will review your company structure and identify all Division 7A risks.
We will implement compliant loan agreements and repayment arrangements.
We will document all transactions to prevent deemed dividend treatment.
We will advise on restructuring options where existing arrangements are non-compliant.

When a loan from your company turns into an unexpected tax problem

You are a successful business owner who has built substantial profits in your company through strategic decisions and hard work. You need to access company funds for personal use, property investments, or to support other ventures. But you are aware that Division 7A could turn these transactions into deemed dividends, creating immediate and potentially large tax liabilities.

What's included in your Division 7A advice service

Your success shouldn't become a tax trap.

Ignoring Division 7A requirements can result in loans and payments being treated as unfranked dividends, taxed at your marginal rate. The ATO can review transactions from previous years, applying penalties and interest charges that compound significantly over time. Worse, improperly documented arrangements can unravel your entire tax planning strategy, costing hundreds of thousands in unexpected tax. The complexity of the rules and the severity of the penalties has many business owners frozen – unable to use their own accumulated wealth effectively.

From Division 7A exposure to confident access

We eliminate the anxiety and confusion around Division 7A by providing clear, actionable advice tailored to your specific situation. We review your company structure, identify existing compliance issues, and implement compliant loan agreements with correctly calculated minimum yearly repayments. We document all transactions properly and restructure arrangements where necessary to avoid deemed dividends. With our work complete, you can confidently access your company profits knowing every transaction is properly documented and Division 7A compliant.

Our Division 7A compliance process.

Take control of your company profits with confidence.

Structure review

We analyse your company structure, existing loans, and transactions to identify Division 7A risks and compliance gaps.

Strategy development

We design compliant strategies for accessing profits, including proper loan documentation and repayment schedules.

Implementation

We prepare all necessary agreements, ensure minimum repayments are calculated correctly, and establish ongoing compliance systems.

Corporate tax specialists with 25+ years managing Division 7A compliance.

We understand the frustration of having substantial wealth accumulated in your company while complex tax rules make you hesitant to use it. We know it feels unfair when you have taken all the business risks but cannot easily access the rewards. We have seen how Division 7A uncertainty can paralyse decision-making and prevent business owners from pursuing legitimate opportunities. For over 25 years, ADLV Law has guided business owners through Division 7A compliance, and our corporate tax specialists have helped hundreds of clients implement compliant structures, saving millions in potential deemed dividends and penalties.

We understand you want to know the cost, before we get started.

We will map out our process, from beginning to end, so you know what the journey will look like before you get started.

We will provide you with a clear and detailed Work Proposal covering each step along the way.

Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.

Our great lawyer guarantee

We want to be part of your team over the long term. We achieve this by adhering to these core principles:

Take the time

We listen carefully to understand what you want to achieve. Then we thoroughly explain our advice and step you through the documents. You can be sure you know the full consequences.

Share our knowledge

We will pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.

Stick to our knitting

We only do what we're good at. You can be confident that we know what we're doing and don't pass on the cost of our learning.

Work as one team

Someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.

Fair pricing

For advice and documents, we provide a fixed or capped quote so you don't take price risk. If you're in a dispute, we map out the process and costs so you know what to expect.

It's your show

We're not in this for our egos. We're in it for a front row seat to witness your success.

Get Division 7A clarity today.

Book a consultation with our experienced tax lawyers to review your Division 7A position and develop a compliant strategy.

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Division 7A tax advice

Protect your accumulated company profits from unexpected Division 7A tax consequences.