The end financial year on 30 June 2023 can be polarizing between those who have no regard for the date and those who mark it on their calendar and count down the days leading up to it.
For many, it’s a date to look forward to, signaling that income tax return refunds will soon be available. For others, it means a tax bill will be payable.
However, the end of the financial year can be relevant in family law matters.
The alteration of property interests in family law matters is legislated under s 79 and s 90SM of the Family Law Act 1975 (Cth). Orders in relation to the alteration of the property, also known as the asset pool, are as of the date of the Orders.
Therefore, the timing of the Orders may need to be considered depending on the composition of the asset pool. For example, a net capital gain from a sale of a property or share which increased in value since purchase will crystallize as tax payable at the conclusion of the financial year in which it is sold.
Further, if a family law matter includes division of a property which includes a company or trust, there might be merit in awaiting the preparation of the most recent financial statements and tax returns for the most recent financial year. This will provide a more up to date assessment of the financial position of the entity.
There may be payable division 7A loans or trust distributions to be considered as part of the end of financial year which could impact the overall asset pool in proceedings.
Our office is highly experienced in family law proceedings and provides tailored advice about the best strategy in family law proceedings with regard to the financial year.
If you think the end of financial year may be relevant to your family law proceedings please feel free to contact our office at 03 9670 4122 to arrange an initial consultation.