Consultation on taxation of company loans to shareholders

Overview

Inland Revenue has launched public consultation on proposals to improve the way new loans by companies to shareholders are taxed.

The main proposal is for a new time limit rule that would treat certain shareholder loans as dividends if not repaid within 12 months from the end of the income year they were made. This proposal would only apply to new loans, not existing ones, and only when a company’s total lending to shareholders is $50,000 or more. 

For more information see:

• officials' issues paper and information sheet linked below
• media release

What happens next

We will acknowledge receipt of your comments immediately, and reply in more detail before the item is finalised.