Qualifying Commercial Loans
Amounts covered by qualifying commercial loans are "excluded" from the calculations under Division 7A. To qualify, such loans must be in writing and meet the minimum interest rate and maximum term criteria set by the ATO. The rate of interest on these loans must not be less than a prescribed benchmark interest rate for each year of the loan. The term of the loan must not exceed either 25 years, if the loan amount is secured by a registered mortgage over real property, or 7 years otherwise. The rules also require that minimum repayments of the loan take place over the term of the loan, in accordance with an ATO prescribed formula.
Read more about this topic: Division 7A Dividend
Famous quotes containing the words loans and/or commercial:
“The contented and economically comfortable have a very discriminating view of government. Nobody is ever indignant about bailing out failed banks and failed savings and loans associations.... But when taxes must be paid for the lower middle class and poor, the government assumes an aspect of wickedness.”
—John Kenneth Galbraith (b. 1908)
“The cultivation of one set of faculties tends to the disuse of others. The loss of one faculty sharpens others; the blind are sensitive in touch. Has not the extreme cultivation of the commercial faculty permitted others as essential to national life, to be blighted by disease?”
—J. Ellen Foster (18401910)