Kerr & Christie

In the matter of *Kerr & Christie*, Altobelli J of the Federal Circuit and Family Court of Australia considered competing applications in complex property proceedings between a husband and wife. The parties, married in 1996 and separated in August 2019, have three adult children and a substantial asset pool valued at approximately $50 million. The wife controlled roughly $35 million of these assets, while the husband controlled approximately $15 million. The proceedings concerned the potential capital gains tax liabilities associated with assets held by a company, B Pty Ltd, and the husband's application for interim funding.

The court was required to determine two primary issues. Firstly, whether an order should be made for the husband to cause B Pty Ltd to apply to the Commissioner of Taxation for a Private Binding Ruling concerning capital gains tax implications on certain company properties. Secondly, the court had to consider the husband's application for an interim payment of $200,000, which he sought to cover his needs, including interim costs, up to and including a conciliation conference.

Regarding the Private Binding Ruling, the court reasoned that the existence of a potential capital gains tax liability could significantly affect the valuation of the husband's shares in the company and thus the overall property pool. To clarify this uncertainty, the court ordered that, should the parties not reach agreement at a conciliation conference, the husband must take all necessary steps to apply for a Private Binding Ruling. This ruling would seek to ascertain whether capital gains tax would be disregarded due to historical ownership or, if not exempt, identify the trigger date for any capital gains tax liability. The application was to be collaboratively prepared by the parties' respective accountants, and the husband was to provide full cooperation and disclosure to the Commissioner of Taxation and his wife. In relation to the husband's financial needs, the court ordered the wife to pay the husband the sum of $200,000 within 21 days of the order.