Commonwealth Consolidated Acts

BANKRUPTCY ACT 1966 - SECT 128B

Transfers that are void

  (1)   A transfer of property by a person who later becomes a bankrupt (the transferor ) to another person (the transferee ) is void against the trustee in the transferor's bankruptcy if:

  (a)   the transfer is made by way of a contribution to an eligible superannuation plan; and

  (b)   the property would probably have become part of the transferor's estate or would probably have been available to creditors if the property had not been transferred; and

  (c)   the transferor's main purpose in making the transfer was:

  (i)   to prevent the transferred property from becoming divisible among the transferor's creditors; or

  (ii)   to hinder or delay the process of making property available for division among the transferor's creditors; and

  (d)   the transfer occurs on or after 28   July 2006.

Showing the transferor's main purpose in making a transfer

  (2)   The transferor's main purpose in making the transfer is taken to be the purpose described in paragraph   (1)(c) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent.

  (3)   In determining whether the transferor's main purpose in making the transfer was the purpose described in paragraph   (1)(c), regard must be had to:

  (a)   whether, during any period ending before the transfer, the transferor had established a pattern of making contributions to one or more eligible superannuation plans; and

  (b)   if so, whether the transfer, when considered in the light of that pattern, is out of character.

Other ways of showing the transferor's main purpose in making a transfer

  (4)   Subsections   (2) and (3) do not limit the ways of establishing the transferor's main purpose in making a transfer.

Rebuttable presumption of insolvency

  (5)   For the purposes of this section, a rebuttable presumption arises that the transferor was, or was about to become, insolvent at the time of the transfer if it is established that the transferor:

  (a)   had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or

  (b)   having kept such books, accounts and records, has not preserved them.

Refund of contributions tax etc.

  (5A)   If:

  (a)   as a result of subsection   (1), a transfer made by way of a contribution to an eligible superannuation plan is void against the trustee in the transferor's bankruptcy; and

  (b)   any of the following amounts was debited from the contribution:

  (i)   an amount in respect of tax in respect of the contribution;

  (ii)   a fee, or a charge, in respect of the contribution; and

  (c)   in compliance with a section   139ZQ notice that relates to the transfer, the trustee of the eligible superannuation plan pays an amount to the trustee in the transferor's bankruptcy; and

  (d)   the amount paid in compliance with the section   139ZQ notice exceeds the amount so debited;

the trustee in the transferor's bankruptcy must pay to the trustee of the eligible superannuation plan an amount equal to the amount so debited.

Protection of successors in title

  (6)   This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property.

Meaning of transfer of property and market value

  (7)   For the purposes of this section:

  (a)   transfer of property includes a payment of money; and

  (b)   a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and

  (c)   the market value of property transferred is its market value at the time of the transfer.