Deed of Loan Forgiveness

About Product

A person, company or trust who is a lender may seek to forgive a loan which may entail a release of a mortgage and personal guarantee. This Deed caters for each of these scenarios.

In addition, it can be used for unpaid present entitlements owed to discretionary trust beneficiaries.

► $129.00 (inc GST) - OR provided under your unlimited membership

► The master document has been signed off by LY Legal and is congruent with Australian law.

General Information

Where a lender and borrower agree, some or all of a loan may be forgiven. If there is a corresponding mortgage, this will need to be released as would a personal guarantee. It is essential for the Trustee to put in place a Deed of Loan Forgiveness and Release of Mortgage and Guarantee to legally cover that consequence.

Benefits

An executed Deed of Loan Forgiveness provides evidence that the Lender no longer seeks repayments of past and current dues.
It can be used as evidence that the loan is extinguished if need be.
The loan forgiveness can be used by the beneficiary of a discretionary trust to be used with any trust distribution to forgive any unpaid present entitlement to the trust.

Frequently Asked Legal Questions

Does the LYD Deed of Loan Forgiveness package meet current taxation law requirements?

The Deed of Loan Forgiveness can be used for many purposes and depending on the purpose the parties may seek the advice of a qualified lawyer to ensure that the Deed meets its desired or requisite purpose. In particular, a review of section 100A of the ITAA 97 may be required for unpaid present entitlements.

Can a Loan Forgiveness be made in-specie?

No, as the loan is a debt due as compared to a gift.

How long does this document take to assemble?

Depending on the complexity of the data, this document should take approximately 5-10 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .

Is this document a legal document?

All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”

However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.

The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:

“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.

Is the document easy to read?

All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.

What lawyers sign off on the LYD documents?

All LYD documents are prepared and signed off by LY Legal.

Are the LYD documents reviewed regularly?

All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.

Can I get a sample of this document?

Yes, please email support@lyd.com.au to request a sample document for you to review.