Private wealth update – December 2023


Posted By , , and on 14/12/23 at 11:33 AM

Welcome to the December 2023 edition of our private wealth newsletter. Rushing headlong into the festive season break, the prospect of spending time with family is both wonderful and very welcome. Long summer days, reconnecting and recalibrating, and celebrating the end of the year while contemplating the fresh start promised by a new one.

For some, this is an incredibly trying time of year.  

In this edition, we focus on issues which commonly arise at this time of year – family law management for separated couples, the possibility of separation occurring during the holiday period, where to obtain support during the break (including in relation to family violence concerns) and estate planning. Plus there’s a gift from Administrative Appeals Tribunal for taxpayers with family trusts.  

We hope you find this newsletter useful. If an article raises questions for you or for a client, please don’t hesitate to get in touch with a member of our team – we are pleased to offer a complementary, no obligation 30 minute phone consultation. 


With the festive season upon us, trustees contemplating income distributions to family trust or testamentary trust beneficiaries must remain mindful of the tax implications when they are declared but remain unpaid. In family structures, trustees commonly distribute the necessary amount to cover the beneficiary’s tax liability but retain the surplus distribution called an Unpaid Present Entitlement (UPE). The UPE is often retained as working capital within the trust or (for what are effectively) interest free or “soft” loans to the parents or principal(s) of the trust. The latter is a prime focus of the Australian Tax Office (ATO).  

Since 2010, the ATO has deemed UPEs to corporate beneficiaries as loans, subjecting them to Division 7A, a specific anti-tax avoidance provision. This Division aims to prevent tax-free distributions to private company shareholders or their associates. Briefly, it treats the deemed loan as an unfranked fully taxable dividend unless specific commercial loan terms (including a prescribed period and a minimum interest rate (approximately 8.27% in FY2024)) are met and confirmed legally in writing. Unpaid UPEs to corporate beneficiaries have since 2010 posed a significant tax cost for trusts which failed to comply with the Division 7A prescribed loan terms and conditions – but perhaps no more.  

The recent Bendel and Commissioner of Taxation (Taxation) [2023] AATA 3074 (Bendel’s case) challenged the ATO’s position. The Administrative Appeals Tribunal (AAT) found that a UPE to a corporate beneficiary does not equate to a loan under Division 7A. It carries significant implications for taxpayers managing private companies and trusts, indicating a potential exemption from the strict Division 7A requirements. This also may allow the broader use of a corporate investment company as a beneficiary taxed at 30% rather than the higher personal tax rates of up to 47%. A nice gift from the AAT, pre-Christmas.  

Whilst the Bendel case’s is under appeal, the ATO continues applying its existing views. Taxpayers should take this opportunity to consult with tax advisors, exploring opportunities including penalty remissions on prior assessments under Division 7A. Strict time limits apply to objecting to such penalty assessments so timely action on this front is required. These considerations of course should be weighed against other provisions in tax law that might come into play, based on the relevant circumstances. 


Christmas can be a difficult time for separated couples and families. For some, having to “divide” the time with their children at such a special time can be challenging. For those couples trying to stay together, it can be the most trying of times, and may actually act as the final catalyst, leading to a jump in applications for divorce in January (known colloquially as divorce month).  

Who gets the kids at Christmas? 

The answer for most separated couples is that both parents do. This is particularly the case when residing in the same State and when children are quite young.   

It is important that couples plan for the Christmas/holiday period as early as they can, and consider a range of options to ensure that any issues can be addressed with the other parent well beforehand.  

Some families opt to divide the period between Christmas Eve and Boxing Day into halves, with the parties alternating Christmas morning and Christmas afternoon, each year.    

Arrangements can be more challenging for separated couples living (or with families) in different states, with many choosing to alternate the Christmas period with the children. Arranging flights at this time of year can be difficult and so it is often the case that the family organises a “second Christmas” either before or after the festive season.    

What about the school holidays generally? 

School holidays are also typically shared with school aged children, however when children are very young this may take the form of extended weekends throughout the holiday period. The amount of nights may well depend on the level of care and arrangements that have been in place during the course of the year, and the ages of the children.   

If you are planning to take the children away for the holiday period, you should consider reaching agreement on set times for the children to communicate with the other parent and ensure that you have provided relevant information and contact details to the other parent. 

If for any reason you do not consent to the children travelling with the other parent, then this needs to be addressed early on, noting that an urgent court application may be difficult the closer we get to the Christmas break.   

Historically, given the number of disputes around these issues, the Federal Circuit and Family Court of Australia has set a filing deadline for any parenting applications, being 4pm on the second Friday of November. Any applications filed after this date, even if urgent, may not be determined before the Court closure.  

For those based in Melbourne, the Melbourne Registry will remain open during the Christmas period, save for public holidays, however many of the registries in other states will close on Christmas Eve and re-open on 8 January 2024.  

How to avoid conflict at Christmas 

Here are some very simple tips to avoid exposing your children to conflict over the Christmas period: 

  • Try and confirm the arrangements for Christmas and the holiday period well in advance.   
  • If you want to take the children interstate or overseas, provide a detailed proposal together with an itinerary and details of accommodation and return flights, a few months prior.  Typically we recommend this is done 60 or 90 days before the date of travel, earlier if you can. 
  • Consider what is best for the children. Know that if you sacrifice a special event or occasion this year, you can negotiate for this time to be with you in the following year.  
  • Keep communication with the other parent open, and if possible use a parenting communication app to do this, to ensure the children are not exposed to these discussions.  Many communication apps such as Our Family Wizard, App Close, Two Houses, Talking Parents or We Parent, have messaging capabilities and shared calendars, which aim for the communications to remain positive, and child focussed.    
  • Ask for help. Although you may not be able to bring a court application, this should remain the last option. Legal and mediation services will be available to you over the festive period.  

Family violence  

In the past few years, December and January have consistently seen the highest number of family violence reports compared to the rest of the year. According to Crime Statistics Data from 2019, Victoria Police responded to 49% more reports of family violence incidents on Christmas Day than the daily average in 2019; and 27% of family violence incidents occur on Boxing Day 2019 than the daily average in that year.   

Typically, Victoria Police attend a family violence incident every 5 minutes, with more than two thirds of all assaults reported between Christmas and New Years Day relating to family violence.   

It is important to note that family violence is not always physical violence, and can take many forms including verbal abuse, threats, financial control or emotional abuse.   

Applications for Family Violence Intervention Orders can be made online through the Magistrates’ Court of Victoria during the holiday period. If immediate police attendance is required, call Triple Zero (000). 

Finalising settlements – the Christmas milestone 

For many couples, there may be a push to finalise property settlement negotiations, the drafting of orders or agreements, before Christmas. The festive period, and new year, can foster a need for these matters to be finalised the break commences, knowing that many in the legal profession take leave in December/January.    

Urgent matters 

We can assist you with any urgent matters over the Christmas period.   

If an urgent matter should arise over the festive season, such as a child being overheld or taken overseas, an order relating to the preservation of property, or in circumstances of family violence, it may be possible to have an application listed urgently on an ex parte basis, without the other party being present.   

If you would like to discuss your personal circumstances with one of our experienced family lawyers, please contact our office today. Call us on (03) 9663 9877 to organise an initial call or appointment. We will be happy to assist you in person, over the phone or by Microsoft Teams or Zoom. 


It’s the most wonderful time of the year. The Christmas season, for some, is a time for gathering with their nearest and dearest. Although there appear to be few similarities between estate planning and Christmas, the giving of gifts at Christmas requires the giver to consider the gifts they wish to make and the intended recipient. Similarly, when making a Will, the willmaker ought to consider their assets, who they wish to benefit and when. 

Types of gifts 

The assets that can be distributed by a will depends on the types of assets a willmaker owns. 

Your Will distributes assets you solely own, such as property, bank accounts and personal belongings. If you own these assets with another person, upon your death the asset bypasses your Will and passes directly to the surviving joint owner. Assets owned in a company or  family trust would remain  the asset of company or trust and not distributed by your Will. 

There are many ways you can provide for your intended beneficiaries in your Will which requires a thorough understanding of the various structures and their implementation.  

Intended beneficiaries 

Although you can make your Will on whatever terms you see fit, you also have a moral duty to make provision for certain people in your life, to provide for their maintenance and support. Pursuant to the Administration and Probate Act 1958 (Vic), the Court can alter a willmaker’s Will for a person who can demonstrate that the deceased had a moral obligation to provide for them and did not adequately do so. Determining who to benefit and in what proportions requires considered planning. 


Upon your death, your Will directs how the executors must distribute your  assets and when.  If the Will is ambiguous or does not satisfy your moral duty, then the executor may have additional work and your estate could incur significant additional costs which will be deducted from your beneficiaries’ inheritance. A properly structured Will can minimise these risks. 

Want to know more? Talk to us! 

To ensure your assets pass to your intended beneficiaries contact us for a confidential, obligation free discussion. 


Our offices will close at 5pm AEDT on Friday, 22 December 2023, and will reopen at 8.30am AEDT on Monday, 8 January 2024. We will be monitoring emails during the office closure, so please don’t hesitate to contact us if you require urgent assistance. 

It’s been a wonderful year for KHQ. We have greatly enjoyed supporting you with your legal needs throughout the year, and we look forward to reconnecting in the New Year. 

Wishing you all a safe and happy festive break. 

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Monica Blizzard

Monica Blizzard Director

Monica Blizzard is an Accredited Family Law Specialist with the Law Institute of Victoria, a trained mediator and collaborative lawyer, and has 20 years experience working in family law.

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KHQ Lawyers - Harry Giannakidis

Harry Giannakidis Principal Solicitor

Harry leads our Tax & Structuring team. He has over 20 years’ experience in advising corporate clients, private family business groups (including SMEs and large family businesses) and high net... Read More

Ines Kallweit Principal Solicitor & Notary Public

Ines Kallweit leads our Wills & Estates team.  She is an Accredited Specialist in Wills & Estates (with the Law Institute of Victoria), a member of the Society of Trust and Estates Practitioners,... Read More

KHQ Lawyers - Jack Stuk

Jack Stuk Principal Solicitor

Jack is a highly skilled and experienced taxation lawyer, proficient in advising on complex tax issues for high net worth individuals, and across business, commercial and estate matters.

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