FED: No tax sense from new family court settlements

AAP General News (Australia)
08-23-2001
FED: No tax sense from new family court settlements

Few people have signed up to binding financial agreements designed to help divorcing
couples keep their property settlements out of the Family Court, The Sydney Morning Herald
reports today.

Nearly 10 months after the law reforms, the newspaper says couples would be stung by
capital gains tax, in some cases hundreds of thousands of dollars.

Splitting couples and lawyers have been frightened off making the private agreements
because of a stoush between the Tax Office and the Attorney-General's department over
possible tax avoidance implications, the Herald says.

Until the reforms, divorcing couples who agreed on how to divide their property still
had to go to the Family Court, which scrutinised the fairness of the deals.

The newspaper says couples who make the private agreements find they are liable for
capital gains tax on the assets transferred from one partner to the other, apart from
the family home.

Under the old settlement route, they get relief from capital gains tax until the asset
is sold to a third party.

AAP RTV gmw/psm/

KEYWORD: DIVORCE (SYDNEY)

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