(03) 9720 2922

Jansen Walsh and Grace

 



What we do


  • Binding financial agreements
  • Parenting agreements
  • Applications to the Federal Circuit Court for property orders
  • Applications to the Federal Circuit Court for parenting orders
  • Intervention orders


Marriage

You can have a financial agreement:

  • with your future spouse prior to your marriage (often called a "pre-nuptial agreement);
  • with your spouse during your marriage;
  • with your spouse following your separation.


De facto

You can have a financial agreement:

  • with your future partner before entering into your de facto relationship;
  • with your partner during your facto relationship;
  • with your partner after the ending of your facto relationship.

Property

If you have purchased a property with your spouse or partner and the relationship has broken down, you may wish to have the property transferred into your sole name.  This is known as a transfer of equity.  At Jansen Walsh & Grace, we will deal with the drafting of the Transfer of Land and the terms of the underlying agreement, including whether you need a court order.  What's more, we will make the process as smooth as possible.  We appreciate that this is a stressful time for you, and we will handle your transfer with care and understanding. 


Savings in land transfer duty on transfer of investment or rental properties 
Transfers of investment and rental properties between spouses and domestic partners are exempt from land transfer duty if the transfer is a result of a breakdown of the relationship.


"How do I avoid capital gains tax on the transfer of my investment or rental property?"
However, transfers of investment and rental properties are subject to capital gains tax.  
If you and your spouse or domestic partner divide your investment or rental property under a private or informal agreement (not because of a court order, a binding financial agreement, an arbitral award or another agreement or award referred to above), the marriage or relationship breakdown rollover does not apply.  If this is the case, you must take any capital gain or capital loss you make on the transfer of the asset into account in working out your net capital gain (or net capital losses carried forward to future years) on your tax return for that income year.

 

Spouses and domestic partners often forget that transfers between themselves of investment or rental properties are subject to capital gains tax.  This is based on the market value of property less the cost base. 

 

This is because rental properties, investment properties and commercial properties are subject to CGT on the transfer regardless of the fact that the parties are spouses or domestic partners.


The spouse to whom the asset is transferred is taken to have acquired the asset at the time of transfer.

 

Special rules may apply if a spouse receiving property does not pay anything for it, or if the amount paid by one spouse for property owned by the other is greater or less than the market value of the property and they are not dealing at arm’s length. In these cases, the transferee is taken to have paid the market value of the property and the transferor is taken to have received the market value of the property. (You are said to be dealing at arm’s length with someone if each of you acts independently and neither of you exercises influence or control over the other in connection with the transaction. It depends not only on the nature of your relationship but also the quality of the bargaining between you.)

 

If you wish to access the CGT exemption for a breakdown, you must have a binding financial agreement or a court order.  Some couples separate and have a DIY agreement to transfer their investment or rental properties.  Of course, this saves on legal fees!  However, the transferring party may be hit with a CGT tax liability which they have to pay.  In most circumstances, where the parties are in agreement, a lawyer's fees are much less than the CGT liability.


Family Law courts merger

On 30 May 2018 the Attorney-General announced that on 1 January 2019 the existing Family Law courts will be merged into a new Federal Circuit and Family Court of Australia, with appeals to the Family Law Appeals Division of the Federal Court.  Under the legislation, the Family Court of Australia and the Federal Circuit Court of Australia will be brought together as the Federal Circuit and Family Court of Australia (FCFC) from 1 January 2019. The FCFC will comprise two divisions: the FCFC (Division 1) would be a continuation of the Family Court, and the FCFC (Division 2) would be a continuation of the Federal Circuit Court. As such, the FCFC will preserve the current cohort of Judges of the Family Court and Federal Circuit Court, including their extensive family law and family violence expertise.  A new Family Law Appeal Division in the Federal Court of Australia will also be established to hear all appeals in family law matters from the FCFC and federal family law appeals from the Family Court of Western Australia.




Hoofbeats
This firm is featured on page 45 of June/July 2018 issue of Hoofbeats magazine: 'Divorce, but what happens to your horses?'  We give the example of what Johnny Depp and Amber Heard did about their horse when they divorced and what the Family Court has said their horses in disputes between separating spouses and partners.

Constructive trust

IZubcic and Zubvic and Ors [2018] FamCA 129, where the Australian Taxation Office was a respondent, Rees J upheld an intervenor’s claim, holding that a transfer of title to property by the husband’s parents to the husband and wife did not operate to transfer the parents’ beneficial interest in the property. The trial judge applied the principles of non est factum and unconscionability to set aside the transaction. The husband and wife had sold the property and used the sale proceeds to purchase another property, as to which the trial judge imposed a constructive trust in the intervenor’s favour.


Financial agreements under the Family Law Act
The Civil Law and Justice Legislation Amendment Bill 2018 will make an amendment to the Bankruptcy Act 1966 which will clarify that the Family Court of Australia has bankruptcy jurisdiction when a trustee applies to have a financial agreement set aside under the Family Law Act.


Family violence
The new Magistrates' Court (Family Violence Protection) Rules 2018 came into force on 3 December 2018.  They bring together, for the first time, the patchwork of rules.