The Australian Taxation Office ("ATO") has historically deemed that a distribution from a family company to a spouse/partner as part of a family law settlement was not a taxable event.
However, the approach of the ATO has changed under a taxation ruling that will have a significant impact on family law settlements involving family companies in the future.
From 13 November 2013, the payment of money and/or transfer of property from a company to a spouse/partner as part of a family law property settlement is treated as a taxable event by the ATO.
The take-home point from this ruling is to ensure that family law property settlements are carefully considered and drafted to best manage taxation liability between the parties, particularly where a family company holds significant assets.
If you need advice on your specific circumstances, do not hesitate to contact our Commercial Law team on 1300 205 506 or by email at sp@sharrockpitman.com.au. We will care for you and best protect your interests.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
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Mitchell is the Managing Principal of our law practice.
He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.
