Is it a Loan or a Gift?

Georgie Wakenshaw - Wednesday, August 23, 2017


Loan from Parents in Family Law Property settlements- it can be a challenge!

Determining if a payment from a friend or a family member is a gift or a loan is a common challenge in family law property settlements. Pursuant to section 79 of the Family Law Act 1975 (Cth) if the payment is classed as a loan, it will be regarded as a liability and reduce the value of the property pool available for distribution. A gift however is considered as an indirect contribution and as such, will not form part of the property pool.

Is it a loan or a gift?

 Factors that the Court will take into account when determining whether a payment is a loan or a gift are:

  • Whether there is any formal loan documentation between the parties and when this was created?
  • What evidence is there of the loan being repaid? eg. Bank statements.
  • Whether any interest or principal payments have been made during the relationship on the loan?
  • Whether a caveat/charge or other security has been provided for the loan?
  • How long the loan has been outstanding?
  • What is the likelihood that the debt will be enforced?.

Has a parent said ‘it is a gift because we want to help you out’? Bear in mind that the Court will also take into consideration informal factors such as conversations about the nature of the loan.

Case examples

In Pelly v Nolan [2011] FMCA a father loaned his son $250,000 to help his son buy a property. After the property was sold, the father loaned a further $70,000 which the son used to purchase a new property. The son did not pay back any of the loan nor had been charged any interest, although the father had prepared a loan agreement. The Court found that even though no money or interest had been repaid, on the balance of probabilities, it was likely that the son would have repaid the loan. Therefore the sum of $320,000 was considered a liability of the marriage and was paid out of the matrimonial pool. The Court first considered the formality of the loan and how it was documented. E.g. there was a formal agreement allowing for interest and a repayment date, and the parties had begun to make some repayments. The Court is likely to view the loan as a liability given that the parties had the intention to repay the loan.

In Maddock & Anor (No.2) [2011] FMCAfam 1340 a father gave the parties $240,000 towards the cost of buying and building a house. The Court found that there had been no formality, no term of repayment, no demand for repayment until the family law settlement and no capacity to pay. On the evidence given to the Court it was decided that if the parties had not separated, the father would never have asked for repayment of the funds. Therefore, the sum of $240,000 was considered a gift and was not required to be repaid. There was no formal agreement or demand for the repayment of the loan prior to separation. The Court held that had the parties not separated, the parent would never have called on the loan to be repaid and as such considered the money to be a gift.

If you have separated or are thinking of separating from your spouse/partner, contact Ashlyn McCurdy at Cosgriff Lawyers to find out more or to arrange an appointment on (03) 5480 6344 or ashlynm@cosgriff.lawyer.


Drinking and driving: Know your limits

Georgie Wakenshaw - Wednesday, August 23, 2017

 

Drinking and driving: Know your limits

Drivers who hold a learner or probationary licence must have a zero blood alcohol concentration (BAC) at all times whilst driving, whereas a full licence holder is permitted to have a BAC up to 0.05.

Victoria

Have you ever had an open alcoholic drink whilst driving? Section 49B of the Road Safety Act 1986 (the Act) provides that drivers are not permitted to drink alcohol whilst driving or in charge of a vehicle and section 49C of the Act prevents passengers from drinking alcohol whilst supervising Learner drivers. Did you know that you would be breaking the law if you were drinking in your car while stationary, as you would be deemed to be ‘in charge’ of the vehicle at the time?

Minimum loss of licence periods for drink driving

Victoria hasmandatory sentencing when it comes to most drink drive offences. When you combine these strict liability offences with mandatory sentencing, you will be off the road for some time!

BAC reading First offenders
0.00 to less than 0.05 (learner or probationary licence holders) 3 months
0.05 to less than 0.07 (learner or probationary licence holders) 6 months
0.05 or more but less than 0.10 (all drivers) 6 months
0.10 or more but less than 0.11 (all drivers) 10 months
0.11 or more but less than 0.12 (all drivers) 11 months
0.12 or more but less than 0.13 (all drivers) 12 months

As you can see, for every 0.01 over the BAC limit, your loss of licence increases by one month.

New South Wales

 Rule 298-1of the Road Rules 2014 NSW (the Rules) states that all drivers are prevented from drinking alcohol while driving. Interestingly, the Rules do not make any mention of passengers also being restricted from drinking even when supervising a Learner driver. The supervisor must, however, be under the legal alcohol limit of 0.05 just as if they were the driver of the vehicle.

Minimum loss of licence periods for drink driving

In NSW all drink driving offences will require you to attend at the Local Court. The minimum suspension period that can be ordered is legislated, but Magistrate does have the option to order a lesser suspension period if you can convince them to do so.

BAC reading First offenders
0.05 or more but less than 0.079 (all drivers) 6 months
0.08 or more but less than 0.149 (all drivers) 12 months
Over 0.15 (all drivers)

3 years

A very common question we are asked is “if I lose my licence in NSW, can I still drive in Victoria?”. As a result of mutual recognition provisions between Australian states, an order for a loss of licence in New South Wales will be placed onto a national database, which may be accessed by Victoria licensing authorities. It is therefore important that you do not drive at all during any disqualification period.

If you have been charged with drink driving, contact Ashlyn McCurdy at Cosgriff Lawyers to find out more or to arrange an appointment on (03) 5480 6344 or ashlynm@cosgriff.lawyer.

 


Capital gains withholding: Impacts on foreign and Australian residents

Georgie Wakenshaw - Tuesday, August 01, 2017


Capital gains withholding: Impacts on foreign and Australian residents

Foreign Resident Capital Gains Withholding (“FRCGW”) first applied to vendors disposing of certain taxable Australian property under contracts entered into from 1 July 2016.

From 1 July 2017 new rules for FRCGW apply to contracts entered into after that date. The changes will apply to real property disposals where the contract price $750,000 and above (previously $2 million) and the FRCGW withholding rate will be 12.5% (previously 10%). The existing threshold and rate will apply for any contracts that are entered into from 1 July 2016 and before 1 July 2017, even if they are not due to settle until after 1 July 2017.

What this means for you:

Australian resident vendors can avoid the 12.5% withholding by providing a clearance certificate obtained from the ATO to the purchaser prior to settlement. Your lawyer will arrange this for you.

Foreign resident vendors may apply for a variation of the withholding rate or make a declaration that a membership interest is not an indirect interest and therefore not subject to withholding.

Purchasers must pay the amount withheld at settlement to the Commissioner of Taxation.

For further information on FRCGW and whether it affects you please do not hesitate to contact Zoe Broadbent at Cosgriff Lawyers.

 


Increase to Minimum Wages and new Penalty Rates from 1 July 2017

Georgie Wakenshaw - Monday, July 17, 2017

 

3.3% increase to Minimum Wages and new Penalty Rates from 1 July 2017

 The Fair Work Commission has conducted its Annual Wage Review and the decision has been made to increase the minimum wage by 3.3 per cent.

The increase will apply from the first full pay period starting on or after 1 July 2017.

The 3.3 per cent increase applies to employees who are covered by an award and employees to whom the minimum wage applies.

The increase does not affect employees who are already getting paid more than the new minimum wage or above the new award rates.

Employers should also note that from 1 July 2017 certain penalty rate provisions in some awards for the hospitality, restaurant and retail industries will be varied.

The changes are different for each award, so they affect employers and employer differently depending on the award they are covered by.

For further information in relation to changes and how they affect your business, please contact Skye Engwerda and Zoe Broadbent.

 


Industrial and warehousing leases and the Retail Leases Act

Georgie Wakenshaw - Thursday, March 23, 2017


The recent decision in CB Cold Storage Pty Ltd v IMCC Group Pty Ltd [2017] VSC 23 (CB Cold Storage) could mean that landlords leasing premises to industrial or warehousing business in Victoria may no longer be able to recover land tax from a tenant and market rent reviews that do not allow the rent to decreased may be void.


Under the Retail Leases Act 2003 (Vic) (RLA) landlords are liable for the payment land tax and any provision of a retail lease that makes the tenant liable to pay land tax is void. There is also a prohibition against provisions in retail leases that do not allow for a decrease of rent after a market rent review.


Until recently, it has been commonly accepted that the RLA does not apply to industrial and warehousing leases. However, CB Cold Storage follows a line of recent cases which have the effect of broadening the application of the RLA. In CB Cold Storage, Croft J determined that the lease in question was in fact a retail lease and thus covered by the RLA. The tenant’s business in CB Cold Storage provided cold storage services to individuals and companies out of the landlord’s warehouse.


The decision in CB Cold Storage used the ‘ultimate consumer’ test to characterise the lease and after considering the nature of the services provided by the tenant to the ‘ultimate consumer or user’, the Supreme Court concluded that the Tenant’s business was ‘retail’.


Given this characterisation of the tenant’s business other industrial and warehousing leases could also be subject to the RLA. Parties cannot contract out of the RLA and its effect is retrospective from the start of the lease. Therefore a tenant may be entitled to be refunded any land tax or incorrect rent paid.


If you consider you may be affected as landlord or tenant by the CB Cold Storage case, please contact Cosgriff Lawyers on (03) 5480 6344.


Purchasing Your First Home

Georgie Wakenshaw - Wednesday, March 08, 2017


Purchasing Your First Home

It’s natural to be a little nervous when purchasing your first home. There’s no denying it’s a big commitment, but it doesn’t have to be daunting. You only buy your first home once and it’s something you’ve looked forward to for years so we think it should fun, exciting and rewarding.

Cosgriff Lawyers is here to guide you through the whole process and to make it as simple for you as possible. Here are a couple of incentives to help you get your first home sooner.

First Home Owner Grant

The First Home Owner Grant (FHOG) is a government initiative to help first homebuyers into the property market. It’s a genuine, one-time grant that never has to be repaid. In both Victoria and NSW, a FHOG of $10,000 may be available for first home buyers who are building or purchasing a new home, to the value of $750,000. This includes off the plan homes or newly built homes that have not been previously occupied.

You may qualify for the FHOG if you meet the following criteria:

  • 18 years old or over;
  • Australian citizen or permanent resident;
  • You are intending to live in the home for a continuous period of at least six months within 12 months of settlement;
  • You have never owned a residential property in any State or Territory in Australia;
  • Have never received a FHOG in any state or territory in Australia.

From 1 July 2017

In an attempt to boost entry into the housing market, the Victorian Government has just announced that it will increase the FHOG from $10,000 to $20,000 for first home buyers building their homes in regional Victoria. The increased Grant will apply to Contracts entered into from 1 July 2017 until 30 June 2020. The same eligibility criteria listed above apply.

Stamp Duty Concession

In Victoria, stamp duty concessions may also available for first home buyers for homes with a purchase price of up to $600,000 and in NSW stamp duty concessions may be available for first home buyers for homes with a purchase price of up to $650,000. The reduced stamp duty amount will depend on the purchase price.

From 1 July 2017

Further to increasing the FHOG to $20,000 the Victorian Government also announced that the stamp duty will be abolished for first home buyers of properties valued up to $600,000 providing a saving of up to $15,000. Duty will be phased in for properties valued between $600,001 to $750,000.

For more information on purchasing your first home please contact Zoe Broadbent at Cosgriff Lawyers on 5480 6344.

 


Bullying in the Workplace

Georgie Wakenshaw - Monday, March 06, 2017
Bullying in the Workplace (Now a Crime Punishable by up to 10 Years Imprisonment) – Employers Must Have a Bullying Policy in Place


What if I am being bullied?

Anyone can be subjected to bullying in the workplace, regardless of their position, salary or seniority.

The Fair Work Commission (FWC) have released an Anti-Bullying Benchbook and has provided the following examples of what constitutes bullying in the workplace:

  1. Belittling or humiliating comments;
  2. Spreading malicious rumours;
  3. Exclusion from work related events; and
  4. Unreasonable work expectations.

At Cosgriff Lawyers our employment lawyers can help you quickly and discretely put a stop to bullying and protect your rights if you are suffering from bullying.

What if I am accused of being a bully?

We also understand that sometimes an employer or employee can be unfairly accused of bullying for reasonable management actions or where there are personality clashes in the workplace.

If you are accused of bullying we can assist you work through the process in an effort to minimise conflict and issues with your employment.

What must all employers do?

At a bare minimum, employers must have a bullying policy in place and provide training to their employees around that policy.

We can draft the policy and attend at your workplace to provide training for your staff.

Bullying can expose employers to legal liability. There are a number of legal actions that can and are being brought against employers arising from workplace bullying. Examples of potential legal actions are:

  • claims for breach of the implied term of good faith in the contract of employment;
  • unfair dismissal claims;
  • unfair contract claims; and
  • criminal charges.

How can bullying be prevented in the workplace?

  • Performance reviews and feedback
  • Providing staff education as to what is and isn’t bullying
  • Early intervention and conducting an investigation into bullying if claims are being made.

Please call or email our office to make an appointment.


Superannuation Reforms

Georgie Wakenshaw - Tuesday, November 29, 2016

 

In October 2016 the Government released proposed reforms to superannuation legislation and regulations. If and once legislated, most measures will take effect from 1 July 2017.

Key changes to superannuation include the following:

  • Introduction of a $1.6 million superannuation transfer balance cap

There will be a $1.6 million transfer balance cap on the total amount of accumulated superannuation an individual can transfer into the tax-free retirement phase. Savings beyond this point can remain in an accumulation account where earnings are taxed at 15 per cent, or may be removed from superannuation.

  • Reduction of concessional superannuation contributions

The Government will reduce the annual cap on concessional superannuation contributions to $25,000. Concessional superannuation contributions are currently $30,000 for people under the age of 50 and $35,000 for people over the age of 50.

  • Introduction of the Low Income Superannuation Tax Offset (LISTO)

The LISTO effectively refunds the tax paid on concessional contributions by individuals with a taxable income of under $37,000. This will avoid situations where a low income earner pays more tax on contributions to superannuation than on their take home pay.

  • Allowing catch-up concessional contributions

From 1 July 2018, the Government will help people catch-up their superannuation contributions by allowing individuals with account balances of $500,000 or less to rollover unused concessional caps for up 5 years. This means that if a person does not make any concessional superannuation contributions in 2018-19, in 2019-20 they will be able to contribute $50,000 ($25,000 for 2018-19 and $25,000 for 2019-20).

For a full overview of the proposed changes to superannuation, please do not hesitate to contact Cosgriff Lawyers.


 


How many hours can your employees work in a week?

Georgie Wakenshaw - Monday, November 14, 2016

 

How many hours can your employees work in a week?

The National Employment Standards (NES) provide that the maximum weekly hours which a full time employee can be required to work is 38 hours per week, plus reasonable additional hours as required by the employer. If an employee is working reasonable additional hours, they are required to paid for these hours at the rate prescribed in the award, or pursuant to a written agreement between the employee and employer.

When determining whether additional hours are reasonable, the NES set outs a number of factors are to be considered.

The NES also provides the ability for an employer and an employee to enter into a written agreement regarding the averaging of hours over a maximum period of 26 weeks.

The Manufacturing and Associated Industries and Occupations Award 2010(Award) contains examples of the type of provisions relating to hours worked that are usually contained in modern awards.

A Manufacturing Industry Example

Ordinary hours: The ordinary hours for day workers (non-shift workers) are 38 hours per week but not exceeding 152 hours in 28 days. Ordinary hours may be worked Monday to Friday inclusive, although by an individual agreement the ordinary hours may include Saturday or Sunday. Where agreement is reached, the rate between midnight Friday and midnight on Saturday is time and a half and the rate between midnight on Saturday and midnight on Sunday is double time.

Overtime: If a day work works hours in addition to their ordinary hours, the overtime rate is time and a half for the first three hours and double time thereafter until the completion of the overtime work.

Work on public holiday: A day worker required to work on a public holiday must be paid for a minimum of three hours work at double time and a half.

Flexibility arrangement of ordinary working hours: The Award allows flexibility of ordinary working hours by agreement between an employer and an individual employee. The matters on which agreement may be reached include:
  • the duration and how the hours are to be averaged within a work cycle;
  • rosters that specify starting and finishing times of working hours;
  • a period of notice of a rostered day off (RDO) which is less than four weeks;
  • substitution or accumulation of RDOs and flexibility in arrangements around taking RDOs;
  • any arrangements of ordinary hours that exceed eight hours in any day.
 

Further, by agreement between an employer and the majority of employees, 12 hour days or shifts may be introduced subject to various factors such as ensuring proper health monitoring procedures being introduced and adequate breaks are provided to employees.


 


Verification of Identity

Georgie Wakenshaw - Thursday, October 27, 2016

 

Verification of Identity

Whether you are selling, purchasing or transferring a property in Victoria or New South Wales, it is mandatory for your lawyer to complete a verification of your identity prior to settlement.

How do I verify my identity?

You must have a face to face interview with your lawyer and provide original identity documents such as:

  • -Australian or foreign passport AND Drivers licence AND Marriage or Change of Name Certificate (if the names on those documents are different);
  • -Australian or foreign passport AND full Birth or Citizenship Certificate AND Medicare or Centrelink card AND Marriage or Change of Name Certificate (if the names on those documents are different)

If you are not able to attend your lawyer’s office you may be able to complete the verification of identity at a post office for a fee.

If your lawyer has any doubts that an identity document does not appear genuine, or a photograph on an identity document in a not a reasonable likeness then they will make further enquiries to verify your identity.

For example, Jack and Jill Jones have made an offer to purchase a house in Echuca for and the Vendor has accepted their offer. A Contract of Sale has been prepared and Jack and Jill go to see their lawyer for advice on the Contract of Sale. During the meeting, Jack provides his Australian passport and Driver’s Licence and Jill provides her Australian passport, Driver’s Licence and Marriage Certificate (as her surname on her passport is Smith). Their lawyer verifies their identity and the land transaction can proceed to settlement.

There is a risk that settlement may not proceed on the agreed date in the Contract of Sale if you have not completed a verification of identity.

Cosgriff Lawyers has a team of property lawyers who keep up-to-date on the latest developments relating to Land Transfers and Verification of Identity. If you are thinking of selling, purchasing or transferring a property, please do not hesitate to contact our office.