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Authors

John Tretola

Abstract

Determining whether a loan from the company to a shareholder/employee is received in his or her capacity as an employee or as a shareholder is important. The capacity of the recipient alters the taxation treatment of the loan. A loan to an employee on favourable terms attracts fringe benefits tax (FBT). A loan to a shareholder may be taxed under Division 7A of the Income Tax Assessment Act 1936.

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