Plainly the final settlement arrangement should reflect this liability. However, in relation to post CGT assets, the transferee does not have the date of acquisition back dated to the time that the asset was acquired by the transferor spouse. This aspect of the rollover regime may have tax advantages. The use by the transferor is disregarded. Further, if the transferee held an interest in the home unit prior to the marriage breakdown, arguably the principal residence exemption may apply to the interest acquired through the rollover.
Considerable care is necessary in all cases involving transfers from companies and trusts.
For example a transfer of property from a family company may be treated as a deemed dividend under section 108 ITAA and taxable in the hands of the recipient. Ideally, any agreement of the parties should be expressed to be a nullity from the outset unless sanctioned by the court. The rollover relief may not be available if the parties agree to dispose of the asset and the court order merely reflects that agreement. In some circumstances it may be beneficial to avoid the automatic rollover, for example, to realise a capital loss to set against a capital gain on another asset. When determining fees to be billed to a client in family law proceedings, it is important to remember that, to the extent that they relate to settlement of matrimonial property issues, legal expenses can form part of the cost base of an asset for CGT purposes.