Presented by Jones Partners
Bosanac v Commissioner of Taxation [2022] HCA 34
In the landmark High Court ruling of Bosanac v Commissioner of Taxation, a wife was able to protect the equity in her family home and prevent it from being accessed by creditors. In this case, Mr Bosanac made a significant contribution to the purchase and financing of a family home, which was then registered on Torrens Title under the name of his wife, Ms Bosanac. Mr and Ms Bosanac were also jointly liable for a loan Mr Bosanac used for trading, which was secured against the family home.
In this landmark ruling, the court delivered a shocking verdict against the existence of a resulting trust (which would have shown Ms Bosanac held on trust Mr Bosanac’s 50% beneficial interest), instead upholding the archaic presumption of advancement. This presumption assumes that real property can be given unequivocally by a husband to their female spouse, transferring both the legal and beneficial title completely. The presumption can only apply for husband gifting to their wives, and not the reverse.
Ms Bosanac was able to retain the full legal and equitable interest, due to the true intention of the arrangement being to make her the sole owner and beneficiary of the property.
This judgment has dramatically changed the already convoluted areas of bankruptcy, trust and family law, providing challenges, but also coherence, in the area of spousal asset protection. Failing to understand the consequences of retaining beneficial ownership of assets can be a costly exercise.
Individuals should note the principles in Bosanac may not always apply, particularly in family law matters, and should seek professional advice regarding their own unique circumstances.