The Impact of Section 90AE of the Family Law Act and the trio in property settlement proceedings: tax, trusts and third parties

Section 90AE of the Family Law Act 1975 (Cth) is a powerful provision because it can result in outcomes such as an alteration of third party rights in property or a taxpayer being relieved from a tax debt. It deserves careful attention. This CPD will examine the operation of s 90AE, including the ambit of the court’s powers and the safeguards to protect third party interests. Issues to be considered include:

The breadth of the court’s power to alter the rights, liabilities or property interests of a third party to a marriage or a de facto relationship;

The court’s power to direct a creditor to substitute a party to a debt;

The use of section 90AE in respect of tax liabilities and the Commissioner of Taxation’s approach to the provision;

The significance of section 90AE as against a taxpayer’s rights and obligations under taxation laws;

The process of joining a third party and key considerations in seeking relief under section 90AE.