The Commonwealth Government has signalled its intention to change bankruptcy laws to penetrate trusts, companies and other entities which shelter assets of high net wealth individuals. Accounting and legal professionals are directly in the Government's sights. The proposed measures will adopt a Family Court style look through approach ignoring form and accessing those assets that a bankrupt would have recourse to on a notional divorce.
This paper covers:
- the relevant rules of bankruptcy
- financial risk planning
- why discretionary trusts work
- the Family Court look through approach.
This paper has been slightly updated since it was first presented by Ken Schurgott at the Asset Protection: Structuring for Asset Protection for High Risk Professionals seminar held in Sydney on 3 July 2003. Ken also presented it on 6 March 2004 at the North Queensland Tax Convention held in Townsville and at the Asset Protection for Tax Practitioners seminars held in Sydney on 7 September 2004 and Parramatta on 9 September 2004.