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Jurisdiction: Australia Wide
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The Creditor is the person or company who is owed money.
For example:
• The person who lent the money.
• The person who sold goods and has not been paid for them.
• The company that did work for someone and is now owed money for it.
The 'Debtor' is the party who owes money to the Creditor.
This hint is provided by Law Central Legal.
This document allows for a beneficiary loan account to be forgiven when that item is clearly and correctly recorded as a loan in the trust books.
The document is not suitable for a beneficiary wishing to release a Trustee from his obligations relating to an unpaid trust entitlement. The debt that is to be forgiven needs to be correctly classified as a loan.
The financial accounts of the trust should have recorded that item as a loan as opposed to an unpaid trust entitlement.
Should you wish to deal with an unpaid trust entitlement then we recommend you look at our Release of Unpaid Trust Entitlement document.
This hint is provided by Law Central Legal.
If the creditor is a trust then you need to put in the details of the trustee:
For a single human trustee-
1. click on human
2. First Name: Fred
Middle Name: James
Last Name: Smith
Capacity: as trustee for the Smith Family Trust
For a company as trustee-
1. click on company
2. Company Name: ABC Pty Ltd
ACN: 123 123 123
Capacity: as trustee for the ABC Family Trust
This hint is provided by Law Central Legal.
You write the name of your company exactly as it appears on your Company registration from when you first registered with ASIC.
E.g. Manley Proprietary Ltd
Correct way is: Manley Proprietary Ltd
Incorrect: Manley Pty Limited
or Manley Proprietary Limited
or Manley Pty Ltd
This hint is provided by Law Central Legal.
"ACN" stands for Australian Company Number. It is a unique number given to every registered Australian company. You can find the "ACN" of your company on the Certificate of Registration you received from ASIC when you first registered your company.
The ACN of a company usually has nine digits.
This is an example of an ACN: ACN 999 250 250.
This hint is provided by Law Central Legal.
Enter the residential or physical address of the creditor. i.e. The number and street.
Do not use the postal address.
This hint is provided by Law Central Legal.
No. There are no lawyers at LawCentral.com.au. LawCentral does not give legal advice. It is only a website that lawyers put documents onto.
This hint is provided by Law Central Legal.
This document only caters for one debtor and one creditor.
If you have multiple parties, please contact us at support@lawcentral.com.au.
This hint is provided by Law Central Legal.
This is the person or company who owes money.
This hint is provided by Law Central Legal.
This document allows for a beneficiary loan account to be forgiven when that item is clearly and correctly recorded as a loan in the trust books.
The document is not suitable for a beneficiary wishing to release a Trustee from his obligations relating to an unpaid trust entitlement. The debt that is to be forgiven needs to be correctly classified as a loan.
The financial accounts of the trust should have recorded that item as a loan as opposed to an unpaid trust entitlement.
Should you wish to deal with an unpaid trust entitlement then we recommend you look at our Release of Unpaid Trust Entitlement document.
This hint is provided by Law Central Legal.
For a single human trustee-
1. click on human
2. First Name: Fred
Middle Name: James
Last Name: Smith
Capacity: as trustee for the Smith Family Trust
For a company as trustee-
1. click on company
2. Company Name: ABC Pty Ltd
ACN: 123 123 123
Capacity: as trustee for the ABC Family Trust
This hint is provided by Law Central Legal.
"ACN" stands for Australian Company Number. It is a unique number given to every registered Australian company. You can find the "ACN" of your company on the Certificate of Registration you received from ASIC when you first registered your company.
The ACN of a company usually has nine digits.
This is an example of an ACN: ACN 999 250 250.
This hint is provided by Law Central Legal.
You write the name of your company exactly as it appears on your Company registration from when you first registered with ASIC.
E.g. Manley Proprietary Ltd
Correct way is: Manley Proprietary Ltd
Incorrect: Manley Pty Limited
or Manley Proprietary Limited
or Manley Pty Ltd
This hint is provided by Law Central Legal.
Enter the residential or physical address of the debtor. i.e. The number and street.
Do not enter the postal address.
This hint is provided by Law Central Legal.
This document only caters for one debtor and one creditor.
If you have multiple parties, please contact us at support@lawcentral.com.au.
This hint is provided by Law Central Legal.
This is the total value of the money owed to you. This includes interest (if any) on the original amount of the debt.
This hint is provided by Law Central Legal.
Select this option if you want to state the exact amount of the debt you are forgiving. You can then enter the specific amount of the debt on the next page.
This hint is provided by Law Central Legal.
This document allows for a beneficiary loan account to be forgiven when that item is clearly and correctly recorded as a loan in the trust books.
The document is not suitable for a beneficiary wishing to release a Trustee from his obligations relating to an unpaid trust entitlement. The debt that is to be forgiven needs to be correctly classified as a loan.
The financial accounts of the trust should have recorded that item as a loan as opposed to an unpaid trust entitlement.
Should you wish to deal with an unpaid trust entitlement then we recommend you look at our Release of Unpaid Trust Entitlement document.
This hint is provided by Law Central Legal.
The term “natural love and affection” is an exception referred to in section 245.40(e) of the Income Tax Assessment Act 1997 (Cth).
Please note ATO Taxation Determination TD 2022/1 published on 9 February 2022 which states:
"Income tax: commercial debt forgiveness - does the exclusion for debts forgiven for reasons of natural love and affection require that the creditor be a natural person?"
"Ruling
1. Yes - the exclusion for debts forgiven for reasons of natural love and affection requires that the creditor is a natural person."
This hint is provided by Law Central Legal.
When entering into this Deed there may be tax and stamp duty/transfer duty consequences. In particular the rules in Division 245 of the Income Tax Assessment Act 1997 (Cth) set out the taxation implications for a debtor when a commercial debt is forgiven.
Other tax issues which need to be considered include:
1 deductibility of interest;
2 capital gains tax;
3 fringe benefits tax – where the Debtor is an employee of the Creditor;
4 other provisions of the tax legislation; and
5 stamp duty/transfer duty.
We recommend that you obtain advice from a lawyer or accountant on the tax and stamp duty/transfer duty consequences before using this document.
This hint is provided by Law Central Legal.
Select this option if you want to state the specific sum of the money being paid by the Debtor to the Creditor. You can then enter the specific sum of money on the next page.
This hint is provided by Law Central Legal.
This document has been prepared by the law practice Law Central Legal
Liability limited by a scheme approved under Professional Standards Legislation
Australia 
New Zealand