In our December 2021 newsletter we discussed the very common asset protection strategy to protect the family home where the home is owned in the name of one person in a marriage and how that strategy may no longer be successful as the result of a court case against Ms Bosanac.
In the Bosanac case, Ms Bosanac owned the family home, but Mr Bosanac owed the Australian Tax Office a large tax debt. The Commissioner of Taxation argued that Ms Bosanac held half of her interest in her home in trust for Mr Bosanac. The Full Federal Court ultimately held that Ms Bosanac did hold half of the home in trust for Mr Bosanac.
However, on appeal, on 12th October 2022 the High Court delivered a unanimous verdict holding that a resulting trust will not arise. The High Court inferred from the objective facts that the parties objectively intended Ms Bosanac to be the sole beneficial owner of the property and that Mr Bosanac was merely facilitating Ms Bosanac’s acquisition of the property.
Accordingly, The High Court has confirmed that the common asset protection strategy of owning the family home in one person’s name can achieve asset protection.
As with all asset protection strategies please discuss them with us first to ensure that they do achieve the desired protection.
Kreston Stanley Williamson
*Correct as of 18 November 2022
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.