Last updated 21 November 2016
Once parties reach agreement about their property settlement or once the court makes an order, transfer documents must be prepared, executed and registered by the parties.
Transfer documentation is required to transfer a spouse’s interest in any real estate, motor vehicles, shares, life policies and vessels. When assets are the subject of encumbrances, such as mortgages, it is usually necessary to remove the encumbrance or make new finance arrangements (e.g. by refinancing any mortgage liabilities).
Duty and capital gains tax
Once the transfer documentation is signed, it must be presented with certain declarations and the court order or financial agreement to the Office of State Revenue for assessment of duty. Most transfers pursuant to Family Court orders and financial agreements are exempt from duty in Queensland under ss 90 and 90L of the Family Law Act 1975 (Cth) (Family Law Act). A transfer should only be executed after the orders are made or, if executed prior to the orders being made, expressly held in escrow pending the making of the orders.
Capital gains tax (CGT) may not be payable on the transfer of some assets if the transfer is made to a spouse pursuant to a court order or financial agreement (provided any transfer under a financial agreement is after 12 December 2006). However, while the spouse who is transferring the asset will not be liable for CGT, the spouse who receives the asset may have to pay CGT when they eventually sell it.
The parties’ latent taxation liabilities should be considered as part of the process of determining the division of the parties’ property. These matters should be considered before an agreement is reached and accounting or legal advice should be sought.
Enforcement of court orders
If a spouse refuses to sign a transfer document or other document that gives effect to the parties’ agreement, the other party can apply to give evidence of the default to the family law courts.
The family law courts may then order that a registrar sign the transfer or other document in place of the defaulting party.
Depending on the nature of the agreement between the parties (financial agreement or an order of the court), other means of enforcement are available (see the Spousal & Child Maintenance and Child Support chapter).
When the parties have settled their property by entering into a financial agreement, the family law courts can use the remedies employed in relation to contracts (e.g. awarding damages or ordering specific performance) to enforce the agreement. Alternatively, a party who is not in default may ask the Family Court to treat the agreement as if it was an order of the court, which can then be enforced in the same way as other orders of the court.
Pursuant to s 117B of the Family Law Act, where the court orders a person to make payment of money by way of property settlement, interest is payable under r 17.03 of the Family Law Rules 2004 (Cth) from the date of the order or as specified in the order.