Divorce

What about this scenario...

Two properties held jointly, both valued at $500k
PPOR has say $250k equity, IP is 100% deductible (20% secured against ppor and 80% against itself).

If one person wanted to keep the PPOR and the other wanted the IP.
When refinancing, the equity from the PPOR would be split and some would go towards the 20% deposit on the IP. ie. the person with the PPOR would be paying out the other person.

When refinancing the IP - would that still be considered paying out the other partner from an ATO perspective? Even though there is effectively a 100% loan against it and not paying the other partner any money from it.

 

Each situation requires personal review. Typically the orders don't work that way and clearly describe the nature of the changes so that the "financing" can be associated with either private use or to refinance existing debt.

eg Mary gets the IP, Dave loses the IP. Dave gets the home, Mary loses her share of the home. Mary may acquire the existing debt and the IP etc. The original debt on ACQUIRING the property prior to the changes can be refinanced from joint to one name etc but it cant go up. If its does its now a blended loan with a non-deductible %.

 

1. Duty applies unless you have consent orders sealed by the family court, then no duty at all. Four - Six weeks with a lawyer, allow 3 months without one.

Duty calculator

http://amun.osr.qld.gov.au/sap/osrqld/wd_tfr_calc_com?WDDISABLEUSERPERSONALIZATION=X#

2. Won't CGT cost way more then consent orders and you are disposing of assets you were otherwise happy with. Also consent orders mean it is done once and for all and binding.

Meant duty above not CGT

 

We do not have kids, so im assuming consent order is not possible? Would anyone recommend me to a family lawyer and maybe an account who can give me some advice before i start the formal process.

 

Whatever is agreed privately must still receive stamping by the Family Court to be valid and final. A family law lawyer will advise on the formalities. eg : Super balances MUST be considered and disclosed in the agreement. That said if its complies it will then be stamped and become a order.

 

Consent orders are still possible, and probably preferable - not sure why you thought kids have anything to do with them?

I don't have any family lawyer contacts in Brisbane sorry - but before you go to one, it is helpful to prepare a broad spreadsheet of your assets and incomes, along with a brief timeline of your relationship.

 

The consent orders in your case are purely in relation to assets and they:
1. allow property transfers/ name changes without any stamp duty
2. mean that you are done once and for all (other person can't come back and get a second.

If you both genuinely agree and you have the time then I would go the DIY route using the kits provided by the family court

DIY Consent Orders
http://www.familycourt.gov.au/wps/w...s/diy-kits/kit-diy-application-consent-orders

DIY Divorce Kits
http://www.familycourt.gov.au/wps/w...fees/court-forms/diy-kits/kit-divorce-service

If you go the DIY route then flick my guys the transfers of the property we will witness/ swear affidavits etc t no cost.

If you don't have time then my Senior Associate -family law will do it for $2500 plus GST completely fixed. It is very time consuming going through the paperwork and we also have to provide you with advice as opposed to just doing the mechanics. We only started a family law division and brought in an experienced family lawyer to run it because we were:
1. seeing too many people think it was all too hard and just paying the duty; or
2. seeing people go off to traditional family lawyers and getting it blown up into such a big thing with such large legal fees that they may not have bothered.

Whatever you do. stay away from time costed family lawyers on both sides, especially if there is any hint of disagreement. You don't want to lose a substantial amount of your assets to legal fees and a traditional family lawyer will go hard and heavy trying to get a better % for their client (often what is left in the pocket can be less than what you would have got if you had agreed to a bad deal at the start and kept the lawyers out of it).

I am repeating myself after my comments in other threads but I can't say it too often, even as someone whose firm has now 2 divisions that make substantial income from litigation (commercial and family) avoid it at all costs. Litigation is expensive, time consuming and draining, divorce litigation is even worse because of the emotion that goes with it. The majority of time the only people who really win it are the lawyers and besides I am sure you have better things to do then spend the next 6-12 months hanging out with lawyers and barristers.