Insights

A collection of news and insights about challenges in business, regulatory issues, finance solutions, business improvement and the ever-changing face of corporate compliance.

Director penalty notices and the family home

Directors beware the risks of personally guaranteeing company ATO debt when a director penalty notice expires. With the volume of DPNs being issued by the ATO rising significantly, it is important for directors to understand the ramifications in the event that the 21-day period expires, and the Company is not in a position to pay the liability associated with the DPN. From this, the ATO can commence proceedings against the director to recover the director penalty amount 21 days after the DPN has been issued.
With the Directors personal assets now being exposed to the amount of the DPN, if they are not in a position to pay it, then the Director will need to consider all the available options, including those within the Bankruptcy Act, 1966. If a director has an interest in the family home (or any real property), and they do become bankrupt, this is where it can become available to the ATO to meet the obligations incurred by the director not acting within 21 days to remit the personal liability arising from the DPN. This is because a home is not a protected asset under the Bankruptcy Act. If there is equity in the property after paying out any proper mortgage and selling costs, the bankruptcy trustee is obliged to realise (i.e. sell) the property. Where the bankruptcy trustee is the only owner, they can put the property up for sale. Where there is a co-owner, the bankruptcy trustee will usually take the following approach:
1. Give the co-owner the opportunity to buy the estate’s interest in the property.
2. Invite the co-owner to join the bankruptcy trustee on agreed terms to market and sell the property.
3. Ask the court to appoint a ‘statutory trustee for sale’ over the co-owner’s interest to force a sale of the property, if there is no agreement to sell the property with the bankruptcy trustee.
The appointment of a statutory trustee forces the sale of the home, even if the co-owner is solvent and has not contributed to the bankruptcy in any way. While the court will often try to soften the effect of such an order by allowing the co-owner time to relocate, the outcome is that the property will be sold. For more information on Director's Penalty Notices and how to deal with them, call us today on 08 9325 1441 for a confidential no obligation discussion.

RBA keeps rates on hold

19 March 2024: The Reserve Bank of Australia said Tuesday that it still can't rule out the possibility that interest rates will need to be raised further, adding that inflation remains too high and is expected to remain elevated for some time yet. The RBA left its official cash rate on hold at 4.35% at its policy meeting.

Using Home Equity to finance a new car

Are you planning to have a new or used car using your home equity but don’t know how? Buying a car is often a major investment property, and developing the funds necessary to purchase one can take time. However, there are some options available that may make it easier.One such option is getting a home equity loan which can be used to buy a car. This allows you to easily access cash, making it an attractive option for financing a car purchase. With careful planning, this type of loan can help cover part or all of the cost of buying your vehicle while still allowing you to secure ownership of your house. Call us today to discuss how best to finance motor vehicles, plant & equipment or cashflow for your business.
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