People occasionally ask why they need to have any kind of legal property settlement. This is particularly the case when a couple has separated amicably and are in agreement as to how they will divide their property.
If you don’t have a formal property settlement that is legally binding – either by way of a financial agreement, consent order or other court order – you run the following risks:
- Your ex-spouse may have an interest in any assets you obtain in the future. A formal property settlement that is legally binding lets you get on with your life and protects your future wealth.
- If the family home is being transferred to you, you might have to pay stamp duty on the transaction. A formal property settlement that is legally binding gives you an exemption from paying stamp duty – that’s 1% of the market value of the share being transferred (typically thousands of dollars) that you don’t have to pay to the Queensland government.
- If you are transferring property or shares, you might have to pay the ATO foreign resident capital gains withholding tax (the name of this tax is quite confusing, as it doesn’t just apply to foreign residents but also to Australian residents). A formal property settlement that is legally binding reduces this tax to Nil.
Justine Dean – Samford Family Law