For a genuine loan, identify the borrower or borrowers, amount, repayment trigger, interest if any, and what happens on sale, separation or death. Consider whether security is appropriate and available, subject to the lender's requirements. For a gift, identify the recipient and any intended conditions clearly. Do not create contradictory documents for the bank and the family. If money comes from China, retain lawful remittance records and evidence explaining its source.
In Bosanac v Commissioner of Taxation (2022) 275 CLR 37; [2022] HCA 34, the High Court rejected the claim that a wife held half a home on resulting trust for her husband. The objective evidence and the spouses' pattern of separate ownership mattered. It was a dispute about spouses and a tax creditor, not a parental deposit case. Its useful lesson is to prove the actual intention surrounding a contribution rather than assuming that payment or registered title settles every beneficial ownership question.
Section 79 of the Family Law Act 1975 (Cth) requires consideration of relevant property interests and liabilities in a married couple's property proceedings. A document labelled "loan" does not itself resolve whether the obligation is genuine or how it is treated. Section 5 of the Limitation of Actions Act 1958 (Vic) generally gives six years for simple contract claims from accrual; the precise repayment terms affect timing, especially for demand loans.
Parents and children should consider separate advice, particularly where a spouse is also involved. Coordinate the arrangement with estate planning so that the executor knows whether repayment is expected. Keep signed documents and a record of repayments. Accurate records now can prevent a future disagreement becoming a costly dispute between generations.
Author: Hugh Zhao
Last updated: October 2026
Jurisdiction: Victoria, Australia
Disclaimer: This article provides general information only and does not constitute legal, financial or tax advice. The law may change and its application depends on individual circumstances. You should obtain professional advice before acting on the information contained in this article.