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Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 44889
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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I have a problem with DIV 7a loans. when pay myself from my

Customer Question

hi i have a problem with DIV 7a loans.
JA: The Expert will know how to help. Please tell me more, so we can help you best.
Customer: when pay myself from my company a pty ltd my personal income has added amounts because of as i understand it div7a so when it comes to paying child support the amounts are alot higher than they should be. the amounts added are not actual dollars ive earnt or received
JA: Is there anything else the Expert should be aware of?
Customer: probably i dont really understand how it works
Submitted: 1 month ago.
Category: Australia Law
Expert:  Leon replied 1 month ago.

Hi, I am Leon, a NSW Solicitor. I will be assisting you with your question. If you choose a telephone call, you will be charged an additional fee.

Expert:  Leon replied 1 month ago.

Good Morning

The child support agency and the law deem the loan as a dividend to you and it increases your income. This also increases your liability to child support.

Under the law it is a deemed income.

Here is some information.

https://www.michaellynchfamilylawyers.com.au/tax-consequences-of-private-company-payments-and-asset-transfers/

I hope this makes sense and is of assistance. If you wish a phone call please elect for one but be aware it will be an additional fee. If there is nothing further thank you for using my services.

If I have missed anything, or you have any further questions please let me know

If there is anything else in the future please do not hesitate to ask.

Please do not forget to leave positive feedback.

Regards
Leon

Customer: replied 1 month ago.
Thanks Leon my next question would have to be how does one get rid of this problem (div7a) because as you said the loan it creates is deemed as income but this amount of dollars is nonexistent. It psychically does pass through, be seen by or be spent by the business or me personally. The div7a loan amount of say 25k added to my actual personal income of say 40k sees an amount that is not a true reflection of what I've earnt, spent or have. Creating an unrealistic unachieve able monthly child support amount. I have just finalised 7years of tax as the ATO was getting nasty. After finishing it all 150k worth of fines/penalties were lifted and I thought I might've had things under control. Until my child support bill which was 30k (don't think that amount was even right as the div7a has been going on a lot longer than the 7 years) over night changed to 86k. I have got no money and am struggling although would still endeavour to pay an amount that is fair. I cannot pay 86k and am due in court on Thursday (two more sleeps) to have my property seized and sold. The only person who would be as devastated as I would if that happens is my soon to be 16 year old daughter whom the support is for.
Sorry for the life story but any info at all any thoughts direction or advice you have would be very much appreciated. Thank you Leon
Yours sincerely ***** *****
Expert:  Leon replied 1 month ago.

Good Morning

You cannot get rid of it if they assess you.

Only if your ex and you can reach an agreement and lodge it with the CSA will they stop assessing you.

But if they continue assessing you, they will include it.

Sorry I cannot give you anything more positive.