Where assets are owned by a company, care is required to ensure that any transfer of those assets, including any proposed cash payments, do not trigger a deemed dividend under Division 7A of the Tax Act 1936. Division 7A sets out the consequences of a private company making payments or lending…

One popular asset protection strategy is known as a gift and loan back arrangement (also called an ‘asset mortgage’ arrangement). A gift and loan arrangement is best illustrated with an example. Assume we have an at-risk individual who owns an investment property valued at $800,000 in their personal name. The arrangement would involve…

Binding financial agreements (BFAs) can be a powerful tool for protecting assets of the parties to a relationship, including assets held in a discretionary trust, in the event of a relationship breakdown. BFAs are a tool created by the Family Law Act</em> which allow parties (whether married or not) to agree…

Following on from our previous article, the second aspect of asset protection which is critical to understand is the ‘domino effect’. The ‘domino effect’ occurs where a single entity owns multiple assets. In the event that a claim is made against that entity in relation to one specific asset, the single ownership…

A key principle which is critical to understand in any asset protection exercise is the difference between limited liability and the ‘domino effect’. Put simply, limited liability is the protection that is provided by trading through a company structure, either in its own capacity or in its capacity as trustee of…