DIV7A loans, eh? Those sneaky little buggers that can leave you feeling quite exposed. Like you were standing before an ATO auditor naked save for your “ahem” financial fears. Don't worry, though, dear friend! Naked Accounting's got your back and we're going to conquer these beasts and get your finances back in the black.
Okay, let's pretend no more. DIV7A loans are kind of a disaster. They're that embarrassing family member who pops up unexpectedly and overstays their welcome. You know they're there, you know you've got to fix them, but you'd sooner just ignore the fact they are. But ignoring them isn't the secret to winning. Trust us, the ATO is not exactly renowned for its leniency.
So, what in the world is a DIV7A loan? Well, basically, it's money your business lent you (or a mate) that you never paid back or recorded as a dividend. It's an IOU written on see-through paper, but the ATO has the specs to read it. And if you don't follow the rules, they'll knock; wearing a hard hat.
But don't worry! Naked Accounting is here to walk you through this minefield of finances. We'll take you through the nitty-gritty of DIV7A loans and better yet, help you repair them. Think of us as your financial wingman (or wingwoman), there to save your back (and perhaps even flash a cheeky wink along the way too).
Here are some solutions to tame the DIV7A monster:
Pay it back: The easy answer? Just pay it back! Sounds simple enough, doesn't it? But the devil is in the details. You need to make sure you're paying the minimum payment and interest at the benchmark rate. Miss a payment or get the interest rate wrong and you're starting from scratch.
Pay a dividend: An alternative option is to pay a dividend to repay the loan. This can be an efficient tax strategy, but you have to get the timing and amounts just right. Get it wrong and you could end up paying more than you expect.
Combination strategy: Sometimes it is best to have a mix of repayments and dividends.
It's a fiscal tango – you have to find the right rhythm, harmony and dance partner (that’s us in case you didn’t realise that).
Refinance: Think of it as a loan facelift.
You may be able to consolidate many loans into one or get good terms.
Don't go it alone! DIV7A loans are tough to deal with and full of confusion. Take one wrong step and you'll be facing penalties, charges and a great deal of stress. That's where Naked Accounting comes to the rescue. We'll guide you when it comes to:
Getting clarity on your commitments: We'll explain the rules in simple English (no techno-speak here!).
Develop a repayment plan: We'll have a chat with you and sort out a plan that fits your budget.
Ensure compliance: We'll make sure you're compliant with all the ATO obligations.
Keep you on the straight and narrow: We'll be your money conscience, keeping you out of hot water.
So, if you're a little nervous about DIV7A loans, relax. Contact Naked Accounting. We'll get your finances in order and have you feeling on top of the world. At Naked Accounting, we believe that finances don't have to be scary. They can be, well, maybe not enjoyable, but at least manageable. And we're here to help you make them so.
So don’t Devi-eight on your DIV7A loans, please book a time with us.