Until Tax Do Us Part

By | January 24th, 2019|

A recent High Court ruling has confirmed that a Court can make Orders effectively shifting tax liability from one spouse to another.

In a recent case, the wife owed the Commissioner of Taxation $256,078.32 plus interest having failed to pay tax during the 17 year marriage.  After the marriage ended, the husband became bankrupt and the wife commenced proceedings shortly after, seeking Orders which included an Order that the husband be liable for her tax debt.

After stoushes in the Federal Circuit Court and then the Full Court of the Family Court, the High Court confirmed the decision of the Full Court that the Court had the power to direct the Commissioner of Taxation to transfer one spouse’s tax debt to the other.  Effectively, the tax liability was transferred to the husband leaving the Commissioner out of pocket for over a quarter of a million dollars.

The message is to pay attention to the financial circumstances of your marriage, and if you do not, be prepared to instruct specialist family lawyers to try and keep you out of trouble.

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