By Jim Main and Michaela Schmidt -
Snapshot
- Always be aware of the terms of trust deeds.
- Always communicate with your client’s accountant when property is sold.
- Beware that tax problems often arise at the end of the financial year.
Fred is a third-generation local farmer for whom you have acted for many years. His wife died ten years ago and he has two children: Alice on the farm and Tony who works as a nurse in a city hospital. You always told them Alice would get the farm – to keep it in the family – but assured Tony that he would be ‘looked after’.
Tony was not all that convinced which often made family gatherings a little tense.
Time goes by and Fred wants to make it all happen before his time runs out. As well as the old family farm, many years ago Fred bought another property some distance away which he put into their family trust. Instead of running that property they leased it out at a pretty good rent. Fred decides the time has come to sell. It sells very well and makes a capital gain of around $4 million.
