A short video on the Company Debit Loan Workpapers can be found here.
The Division 7A Workpapers are designed to calculate the minimum yearly repayments on a shareholders loan, an unpaid present entitlement to a trust, and to calculate the company’s distributable surplus.
To start off with, make sure that all of the details have been included on the home page. This is very important as the calculations rely on the dates to calculate correctly.
The Div7A Calculator worksheet determines the interest and minimum repayments for the financial year on shareholder loans.
Once the Division 7A workpaper is added, change the name on the index page. This name will flow through to the loan details section of the worksheet.
Enter the loan details, including whether this was the first year the loan was made or the year afterwards. The date entered on the home page will automatically select the correct benchmark interest rate. This will also affect the interest rates used for the minimum repayments.
If the loan commenced during the current financial year, enter the date and the amount in the Draw Downs column in the transactions for the year. If the loan commenced last year, enter the balance of the year, along with any repayments made prior to the lodgement date of the company’s tax return in rows 37-43. Also enter the term of the loan in years, either 7 or 25. If the loan commenced prior to the beginning of the financial year, enter the opening balance of the loan in the appropriate cell in the top section of the loan worksheet.
If it was the second or subsequent year after the loan was made, complete the details in rows 48-51. Enter any drawdowns or repayments, including the minimum repayment that’s been made into column G in the Transaction for the year.
The minimum repayment calculator down the bottom gives you the minimum repayment required for the current year, and future years based on the current years interest rate.
UPE Repayment Calculator
This worksheet calculates the loans described in PS LA 2010/4 Section 3 loans – a UPE held on a sub-trust.
Add a workpaper and select the UPE repayment calculator. Change the name on the index page.
In the UPE details section of the worksheet, select the correct one from the drop down box if it hasn’t automatically selected. Choose which option that you wish to use from PS LA 2010/4. The worksheet allows for the first 2 options – option 1 - an interest only 7 year loan using the ATO’s benchmark interest rate, or option 2 - an interest only 10 year loan calculated using the prescribed interest rate.
Enter the start date into cell J32. If the loan is in its last year, you will get a message in cell J40 letting you know that the principal must also be repaid in that year.
Enter the amount advanced during the year or the opening balance from the previous year. Any repayments get entered into column G of the Repayments section.
The interest payments are calculated In the interest payment calculator. The future years interest calculation is an estimate only, as the interest rate is based on the current year interest rate as the future interest rates are unknown.
To show a summary of amounts, on the index page, click the Refresh summary button. This will bring through the opening balance, actual payments made, interest and closing balance for each separate loan, as well as a summary of the totals down the bottom.