Page 39 - drive a2b october 2019

Family Law Act. This means that The failure to formally discharge orders may provide for a range of
any CGT liability is deferred until obligations under a joint loan matters concerning the division of
such time as the asset is later or guarantor arrangements can assets and liabilities, including:
transferred by the party acquiring also leave a party in a precarious • the transfer of property from
it, although the asset will remain financial state. one party to the other;
subject to the same CGT conditions • the payment of funds in
as it was before the transfer. Finalising your property exchange for the transfer of
division
A potential future CGT liability is property;
an important consideration when Once separated parties have agreed • the sale of real estate or other
negotiating a property settlement. on the division of assets and property;
Care should also be taken when liabilities, and obtained independent • the splitting of superannuation;
dealing with companies and trusts legal and / or financial advice, • requirements for paying out
where various transactions could the negotiations can be made loans, credit cards, etc;
raise CGT issues. legally binding through a financial
agreement or by consent orders. • financial support (maintenance)
Claims on post- of one spouse by the other.
separation assets A financial agreement is a contract
between the parties – each have Conclusion
An informal property settlement is certain rights and responsibilities
not legally recognised as bringing and must perform their obligations Generally, family lawyers will
the couples’ financial affairs to according to its terms. Financial support a reasonable agreement
finality, even if negotiations have agreements are not approved or reached between a separating
been put in writing. Not only is an registered in Court but, provided couple. In doing so however, they
informal agreement insufficient to they are properly prepared, and will ensure their clients are fully
obtain relief from stamp duty or each party obtains independent aware of the implications of a
relevant tax exemptions, the parties legal advice, they are generally proposed property settlement,
are unprotected against a range enforceable by a Court. flag potential taxation issues and
of potential issues down the track. address future matters that may not
These include a subsequent claim Consent orders are similar to have been contemplated between
by either party on post-separation financial agreements however a the parties. The negotiations
assets, income and inheritances. Court must approve the proposed can then be recorded in a legally
The parties are also left vulnerable orders. The parties to consent binding agreement that meets
should one of them become orders do not need to attend Court the requirements for stamp duty
bankrupt and the joint ownership of for the orders to be finalised. concessions and, where relevant, tax
assets has not been severed. relief.
Financial agreements or consent
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DRIVE A2B magazine · October 2019 39