or dgriffin@degroots.com.au
reintroduced and that his family would
be thus protected in the event of his
death owning assets of any substance.
These are reasonable and responsible
fears entertained by any young
business or professional man".
Dr Redman acquired property through
the trust and entered into a lease
arrangement so that he could occupy it.
payments, under the mortgage that
funded the purchase, were "outgoings
... are ... private or domestic nature".
The Supreme Court found that Dr
Redman's steps in acquiring this
property through the trust, granting
a mortgage and leasing the house to
himself were all taken having regard
to the interests of all the possible
beneficiaries, including those who
might enjoy, in the year 2058, when
the trust was to vest, the corpus of
the trust estate.
the Income Tax Assessment Act 1936.
In Taxation Ruling 2002/18, it was
stated that an individual taxpayer
who borrowed money to acquire
units in a unit trust and who incurs
the interest expense (as opposed
to the trustee in the Janmor case),
could not claim that the interest is
deductible on the basis it is not of a
private or domestic nature.
up, they need to be administered
in a way that is consistent with the
be reviewed periodically, as and when
the law changes.
was surprised that unsecured loans
from his father, which he had hoped
would operate so as to retain the
family wealth within the family,
were unenforceable.
`family assets' by supporting a child
purchasing a property but by making
it clear that such support is a loan
rather than a gift. The notion is that
if the relationship with the child
becomes difficult, the parents can call
in the loan. Most of these loans are on
an `at-call basis'.
were in fact gifts, even though the
loan was documented and there was a
provision for some interest to be paid.
Limitations began from the date the
money was advanced, the borrower
attempted to acknowledge the debt
in an attempt to restart another
six-year period under the limitation
legislation.
document the loans and protect them
ended up making the case for the now-
estranged family member, i.e. that the
loans were in fact unenforceable.
a `set and forget' approach will not
provide clients with anything other
than mistaken peace of mind.
in, the creditor is extremely pleased.
The writer has acted for a medical
specialist who celebrated long into the
night when his daughter's marriage
broke up and he made a formal
demand to be repaid within seven
days. The daughter has since drawn
down on the loan again to buy a
property with her new partner.
remember that the law works
differently to medicine. `Do no
harm' does not appear in our codes.
Unless there is a legally enforceable
agreement to share all liabilities
equally, a disappointed patient or
creditor may enjoy pursuing the
business partners of the colleague who
caused the disappointment.
might very well harm the assets you
have worked hard to build up.
if they are established properly.
Recent cases have found that, in the
circumstances of the case, the trust is
really an alter ego of the party to the
litigation. Where the trust deeds have
not been reviewed since those recent
cases, it is highly questionable whether
a court would find that they do protect
the assets owned by that trust.