When a Family Loan Isn’t a Loan: Family Law and Tax Traps

Loans between family members are a common way of helping children purchase property, fund a business or build wealth. But when a relationship breaks down, what was intended to be a genuine loan can come under significant scrutiny.

Recent Family Court decisions provide an important reminder that simply documenting an advance as a “loan” may not be enough. The Court may look closely at how the arrangement was established, documented and treated over time when determining whether it should be recognised as a genuine liability in a family law property settlement.

There can also be important tax implications when structuring financial arrangements between family members, particularly where discretionary trusts, companies or other family structures are involved.

Join Adam West, Principal/Director and Accredited Specialist in Family Law and Stephen Lau, Principal Lawyer and Head of Taxation & Superannuation, as they examine family loans from both a family law and taxation perspective.

Using recent cases and practical examples, Adam and Stephen will discuss:

• When is a family loan really a loan? How the Family Court approaches loans between parents, children and other family members, and the circumstances in which they may be disregarded or treated differently in a property settlement.
• Getting the structure right from the outset – documentation, repayment terms, security, enforcement and other factors that can help demonstrate a genuine debtor-creditor relationship.
• Asset protection and relationship breakdowns – what families should consider when advancing funds to children or other family members and seeking to protect family wealth.
• The role of Binding Financial Agreements (BFAs) – whether a BFA can provide an additional layer of protection alongside a properly structured family loan.
• Trusts and family wealth structures – the potential family law and asset protection issues that can arise when relying on discretionary trusts and other structures.
• Tax implications and traps – key taxation considerations when establishing, managing or restructuring family loans and associated family entities.
• Lessons from recent cases – what recent Family Court decisions tell us about where arrangements can go wrong and the practical steps families and their advisers can take.

Who should attend?

This seminar will provide practical insights for accountants, financial advisers, and other professional advisers who assist clients with intergenerational wealth transfers, family structures, asset protection and succession planning.

With both family law and taxation considerations increasingly intersecting in these arrangements, obtaining advice across both areas at the outset can be critical to ensuring the structure achieves what the family intended.

Places are limited, so book early to avoid disappointment.