The ATO interest came off the pool before the split. On the numbers, a remission would have been shared too.
Your client and their spouse did not lodge Australian tax returns for years. Between them, they owe the ATO $743,105 in interest. Now they are separating.
If the ATO cancels some of that interest by remitting it, who gets the saving?
Many advisers would say the spouse whose interest it is. It is that spouse’s debt.
The reasons in Cassian & Soter never discuss remission. But on the numbers, both parties would have shared the saving. By agreement, the interest came off the property pool before the split. So had the ATO remitted $100,000 of the husband’s interest before the hearing resumed, up to $55,000 would have gone to the wife.
Cassian & Soter [2026] FedCFamC1F 461.
The interest is only the start. Three other points in this case are worth knowing.
Property went to her brother during the case
The husband’s claims about the transfers failed.
For many years, a significant part of the family’s income came from loans from her brother. After the case began, she transferred the former matrimonial home and other overseas properties to him, apparently to repay those loans [47, 51]. The husband said she had sold property to her brother at an undervalue [70]. His counsel “properly conceded” there was no evidence to put a number on it [69].
A claim that family got a bargain may go nowhere without a valuation.
The family company shares never reached the balance sheet
The wife’s shares in her family’s company group were “essentially impossible to value”, the judge found [109]. They are part of a family group shareholding and can only be severed by agreement or by court order [109]. So they were treated as “a valuable financial resource” instead [110]. The husband sought an extra 10 per cent, partly because of them [102]. He got nothing extra [112].
For business families, how the shares are held may matter as much as what they are worth.
He sent his other partner about $167,000
The wife could not reach the house she then bought.
The husband kept a second relationship from the wife over two significant periods, with four children [54]. After they separated in June 2020, he drew $278,369 from his super [45]-[46]. He sent about $167,000 to his other partner, who bought the house she had been renting [46, 60]. The wife said that house was held on trust for him [6, 62]. That failed, because the money was a gift meant to be hers [64]-[65]. But the whole $278,369 went on his side of the ledger, as he had proposed [82].
A gift to another partner may be out of reach. Its value can still count against the giver.
This is a first instance decision.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.