This Division   treats 3 kinds of amounts as dividends paid by a private company:

•   amounts paid by the company to a shareholder or shareholder's associate (see section   109C);

•   amounts lent by the company to a shareholder or shareholder's associate (see sections   109D and 109E);

•   amounts of debts owed by a shareholder or shareholder's associate to the company that the company forgives (see section   109F).

This treatment makes the amounts assessable income of the shareholder or associate (under section   44).

However, some payments, loans and forgiven debts are not treated as dividends. (See Subdivisions C and D.) Also, this Division   does not apply to demerger dividends. (See Subdivision   DA.)

An amount may be treated as a dividend even if it is paid or lent by the company to the shareholder or associate through one or more interposed entities. (See Subdivision   E.)

An amount may also be included in the assessable income of a shareholder or shareholder's associate if:

  (a)   a company has an unpaid present entitlement to income of a trust; and

  (b)   the trustee makes a payment or loan to, or forgives a debt of, the shareholder or associate.

(See Subdivisions EA and EB.)

If the total of the amounts is more than the company's distributable surplus, only the part of the total equal to the distributable surplus is treated as dividends. (See section   109Y.)

This Division   applies to non - share equity interests and non - share dividends in the same way it applies to shares and dividends.