Australian High Court Rules Unpaid Present Entitlements of Corporate Beneficiaries are Not Loans Under Division 7A Rules

The High Court of Australia delivered a judgment on 10 June 2026 in Commissioner of Taxation v Bendel [2026] HCA 18, dismissing the Commissioner's appeal from the Full Federal Court decision in Bendel [2025] FCAFC 15. The case concerned the application of Division 7A of Part III of the Income Tax Assessment Act 1936, under which certain payments, loans, and forgiven debts by private companies to shareholders or their associates may be treated as deemed dividends. The key issue was whether a c…