If you own an investment property and it is intended that the property will be sold either to give effect to family law property settlement orders, or it was acquired solely as an investment with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable when dividing property under a property settlement. A failure to have proper family law and tax advice in relation to the capital gains tax consequence can prove to be a costly error when dividing property.
In Taffner & Taffner  FamCAFC 68, the Full Court was asked to consider whether the trial judge had erred by failing to consider capital gains tax liabilities, where one property (K Street property) had been sold and where another property had the possibility of being sold (H Street property), as follows:
It is sometimes difficult for capital gains tax to be estimated with precision during the course of the year. Taffner highlights an ability to work around this by framing orders that provide for the payment of capital gains tax in proportions that are consistent with how it is intended property be adjusted overall and the agreed or determined outcome. This is consistent with how other debts are dealt with under a set of family law property settlement orders.
If you have queries about the treatment of tax considerations in your family law property settlement, please contact Matthew Beckmans for a 30 minute no cost consultation to provide you with tailored advice in relation to you and your individual circumstances. Our lawyers continue to work remotely and are available for telephone and Skype/ Zoom appointments. Our Family & Relationship Law team is here to help you navigate difficult issues during these difficult and unprecedented times.
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