6-8 William Street, Nambour, Sunshine Coast

On what terms can I loan company funds to family members?

Learn about he implications of Division 7A to ensure you and your company don’t run afoul of the law.

I have heard that the Bank of ‘Mum and Dad’ gives out more loans than any of the big banks. Most of the time, that loan can be structured in a way where the parents are protected but the kids get a good loan deal.

However, if funds are tied up in a private company, it can become difficult for that company to loan funds to family members, on the terms that they wish to.

Division 7A is part of the Income Tax Assessment Act 1936 under Business Law and is intended to prevent profits or assets being provided to shareholders or their associates (such as their children) tax free. It works to treat payments by a company to a shareholder or their associate as a dividend for income tax purposes, even if the parties treat it as some other form of transaction such as a loan, advance, gift, or writing off a debt.

In case of parents wanting to use a private company to loan or gift funds to their children, if Division 7A applies, then their children will have to pay income tax on the money/loan received under Business Law. This is usually less than ideal. 

If you are looking at loaning money to a family member, come speak to our Nambour business lawyers in Sunshine Coast. Butler McDermott’s Nambour law firm is here to help you make sure that you structure the loan in the right way, and protect everyone involved.

Recent Posts

Contact Butler McDermott

Simone Faunt


Peter Boyce


Peter has been practising as a Nambour Solicitor since 1977 and joined Butler McDermott Lawyers the same year.

With over 40 years practicing as a Sunshine Coast lawyer, Peter has extensive knowledge of various facets of law.

He has practised in all areas of litigation and has special interests in:

  • Criminal law
  • Civil and Commercial litigation
  • Retirement Village matters
  • Sports law
  • Resumption of land and compensation claims


Peter has specialised knowledge of and experience with resumption matters as a result of the Traveston Dam project, road corridors, Main Roads and water pipeline. He is renowned for his professional approach and is an experienced and determined advocate.

Brent King


Brent works as a litigation lawyer, providing litigation legal advice in relation to both civil and criminal law matters, including:
  • Defamation Claims
  • Contract and Debt Disputes
  • Building and Construction Disputes
  • Planning Matters
  • Criminal Law and Traffic Legal Matters
Having grown up on the Sunshine Coast and joining Butler McDermott after the completion of his studies, Brent appreciates the needs of our clients, and brings a particularly commercial approach to litigation. Brent is a member of the Queensland Law Society and the Sunshine Coast Law Association, and has litigated a wide variety of matters in the Magistrates, District and Supreme Courts.

Al Upton


After arriving at Butler McDermott Lawyers in 2016, Al quickly progressed to running our Wills and Estates section and has successfully litigated disputes in the Supreme and District Courts of Queensland in the early stages of his career.

In the years that followed Al has now moved to assist our clients with commercial and property matters having achieved positive outcomes in that area as well as general litigation. Al’s experience has him uniquely placed to provide quality advice in the areas of property, commercial, wills and estates and general litigation.

Al is involved in giving back to the community, sitting on the board for the Daniel Morcombe Foundation and Sundale Community Foundation. He otherwise became a director of Butler McDermott Lawyers in November 2021.