Page 1 - Wealth-Adviser-Issue-137 (FWP)

ISSUE 137 MAY 2026

WHEN THE LOAN BECOMES A GIFT

Why Family Lending Needs a Document depositphotos.com

BY WEALTH ADVISER

n 2009, an elderly Queensland couple transferred $98,000 to their son to help with a
struggling business. Over the years that followed, more money flowed across — further
Itransfers, then access to the father’s credit card, which the son used to run up another
INSIDE $13,000 of debt. Throughout, the conversations were informal. The son once said he would
“definitely repay the monies back and even more”. There was no written agreement, no
1 When the Loan Becomes a Gift: schedule of repayments, no specified interest rate. The parents’ bank statements described
Why Family Lending Needs a the transfers as “loans”. The parents’ ledgers, such as they were, did not.
Document When the parents eventually demanded repayment in 2015 — after the son had stopped
5 The Home You’re Sitting On: showing any inclination to pay — they ended up in court. At first instance they lost. The
Reverse Mortgages and the District Court found that the verbal statements and informal context were more consistent
Government Scheme Almost No with the son being “morally obliged” to repay rather than legally bound to do so. The total
One Knows About
being claimed at that point had grown to more than $286,000 with interest. The parents
9 Working Past 65: How Tax, appealed and, in Berghan v Berghan [2017] QCA 236, the Queensland Court of Appeal
Super, and Centrelink Now Fit reversed the decision and found that the advances were loans the parties had intended to
Together
be repaid. The parents won — but only after years of litigation, the expense of taking the
13 Q&A: Ask a Question matter to the Court of Appeal, and a result that could easily have gone the other way.

BEFORE YOU GET STARTED
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244252) and contains general and factual information only. investment or financial decisions.
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it is suitable for you. You should also consider consulting a suitably qualified obtain and read a Product Disclosure Statement and consider whether it is
financial, tax and/or legal adviser. appropriate for your objectives, situation and needs.