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Am I dealing with a debt or an unpaid present entitlement?
A number of our previous articles have discussed the tax, stamp duty and trust law consequences of dealing with debts and unpaid present entitlements. Those articles highlight the differences that can arise between those two amounts – for instance, how the commercial debt forgiveness rules in Division 245 Tax Act…
2 min read
Child maintenance trusts – when are they useful?
Child maintenance trusts offer a tax planning opportunity where child maintenance payments need to be made in respect of minor children, following a relationship breakdown. Generally, where one party is required make child support payments, those payments will be made from that party’s after-tax income and are not tax deductible...
4 min read
Division 7A and divorce – a dangerous duo
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…
3 min read
Division 7A and deceased estates – minimum repayment obligations
There are a number of tax and stamp duty implications which can arise following the death of an individual, where that individual held interests in related entities. One scenario we encountered recently involved a loan which had been made by a private company to an individual shareholder, who subsequently died...
3 min read
Dealing with UPEs – navigating the reimbursement agreement provisions in section 100A
Section 100A of the Tax Act 1936 has been in place since 1979 but has received relatively little attention until recent years. It is designed to prevent schemes in which trust profits are distributed to low-income taxpayers while the economic benefit of the profits is received by another entity, usually a…
2 min read
Binding the Tax Office – tax debts and divorce
Two tax issues need to be considered by family law advisers when structuring family law settlements: the availability of CGT roll-over relief on the transfer of assets and the consequences for each party of receiving an inherited cost base; and the intended apportionment of liability of the parties for existing…
3 min read
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