# Division 7A Minimum Yearly Repayment Calculation

## Minimum Yearly Repayment

**$9,857.98**

## Working

Given:
- Principal (P) = $50,000
- Benchmark interest rate (r) = 8.77% per annum = 0.0877
- Remaining loan term (n) = 7 years
- Formula: MYR = P × r / (1 - (1 + r)^-n)

Calculation:
- Numerator: P × r = $50,000 × 0.0877 = $4,385.00
- (1 + r)^-n = (1.0877)^-7 = 0.5551829245
- Denominator: 1 - 0.5551829245 = 0.4448170755
- MYR = $4,385.00 / 0.4448170755 = **$9,857.98**

## Controlling Authority

The controlling authority for the Division 7A minimum yearly repayment rule is the **Australian Taxation Office (ATO)**, which administers the Income Tax Assessment Act 1936 (ITAA 1936), Division 7A, which governs the taxation treatment of loans made by companies to shareholders.