AUSTRALIA Law and Practice Contributed by: William Moore, Frank Hinoporos, Emma Woolley and Todd Bromwich, Hall & Wilcox
appointment of successor directors and tailored pro - visions for ongoing decision-making. Finally, where interests are held with third parties, “buy-sell agreements” should be entered into, requir - ing the forced sale or purchase of a business owner’s interest on death or incapacity of a key individual. These are frequently funded by life and total perma - nent disability (TPD) insurance. 4.3 Transfer of Partial Interest In Australia, CGT may be charged on a taxpayer dis - posing of a capital asset. Transfer duty is charged by Australian states and territories on taxpayers acquir - ing an interest in land or in certain landholding entities. For CGT purposes, any capital gain is calculated by reference to the consideration received, which may be substituted with market value in certain circumstances (including sales for nil consideration and transactions not at arm’s length). For duty purposes, the dutiable value is the greater of the consideration provided and the unencumbered market value of the land. The fair market value is gen - erally based on an arm’s length valuation. For estate transfers under a Will, a duty exemption or concession may apply. If the transfer is not in con - formity with the Will or involves variations agreed to by family members, duty may be assessed at general rates on the dutiable value of all or part of the interest. Wealth disputes in Australia are rising significantly, driven by a combination of demographic, economic and social factors, including: • the unprecedented intergenerational wealth trans - fer in which trillions of dollars are expected to pass from the Baby Boomer generation over the next 20 years – where estates grow in value, so do the financial incentives to litigate; • increasing family complexity – blended families, second marriages, stepchildren and estranged 5. Wealth Disputes 5.1 Trends Driving Disputes
family members create competing expectations and heightened risk of family provision claims; • economic pressures such as cost-of-living stress and housing affordability, which are also driving more adult children to contest estates; • not having a valid up-to-date Will, particularly where circumstances have changed (such as separation, which is treated differently to divorce), leading to confusion and costly litigation; • longer life expectancy and cognitive decline, which lead to incapacity issues and allegations that the testator did not have the required decision-making capacity to make a Will due to their old age or ill - ness; • a rise in cases of (alleged) elder abuse, often stem - ming from informal arrangements, such as transfer - ring property to a child or granting access to bank accounts without legal advice; and • in the trusts space, there is a rise in complex trust disputes involving issues such as the legal treat - ment of testamentary promises in the context of equitable estoppel. 5.2 Mechanism for Compensation In Australia, compensation mechanisms in wealth dis - putes, whether involving estates, trusts, foundations or family-controlled entities, focus on restorative and equitable outcomes rather than punitive damages. Estate Disputes Courts commonly adjust distributions through family provision orders to ensure proper maintenance and support of eligible dependants or to set aside invalid Wills and require the repayment of misused assets. Trust Disputes These disputes typically result in equitable remedies such as compensation for breach of trust, account of profits, constructive trusts or the removal of trustees, all aimed at restoring the trust to the position it should have been in. Foundations and Charitable Structures Foundations and charitable structures may face orders to repay misapplied funds, governance inter - ventions or regulatory sanctions to ensure compliance with donor intent and public purpose.
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