Can you gift company assets in your Will?

As a private business owner, you may assume that because you control your company, its assets are your own, you probably even refer to them as ‘my property’ or ‘my farm’. But does this mean you can leave company assets to whomever you like in your Will?

As Ireland v Retallack [2011] NSWSC 846 clearly illustrates, control is not the same as ownership, and making this mistake can derail even the most well-intentioned estate plans.

In this article, we revisit the key lessons from Ireland v Retallack and what it means for business owners and farmers who own assets in corporate structures who want to pass wealth to family or friends.

Ireland v Retallack: A cautionary tale

The late John Retallack owned 989 of 990 shares in a private company that held a parcel of real estate in Bega, NSW. In his Will, Mr. Retallack attempted to gift that real property to his daughter. Thinking it might help, he also included a clause in his Will allowing his executors to ‘manipulate’ personal and company assets to carry out his intentions. However, upon his death, it became clear that the Bega property was not his to give. It was owned by the company, not Mr. Retallack personally.

Despite his majority shareholding and expressed wishes in the Will, the property did not form part of his estate. The executors could not simply transfer it to the deceased’s daughter as if it was personally owned property. The matter went to court in what is known as a construction suit – a legal proceeding to determine what the Will meant and whether its instructions were valid and enforceable.

As a company director, making sure your wealth ends up where you intend can be a complex exercise. Call us on 1300 654 590  or  email us to put a tailored plan in place.

Why the gift failed: understanding the corporate veil

At the heart of the case is the fundamental principle of corporate law: a company is a separate legal entity.

This is often referred to as the corporate veil. It means that even if you’re the sole director and 100% shareholder, you do not personally own the assets of the company. They belong to the company itself.

As a result, you can gift your shares in the company through your Will, but you cannot gift the company’s assets (such as property, vehicles, equipment or bank accounts) unless they are personally owned by you.

Attempting to bypass this distinction by asking executors to ‘manipulate’ assets or restructure companies risks legal challenge, tax consequences, and fiduciary breaches. Importantly, executors cannot compel a company to act in a way that breaches directors’ fiduciary duties, nor can they ignore corporate governance to effect a testamentary gift.

The hidden costs: legal fees, accounting advice, and tax

In Ireland v Retallack, the fallout from this mistake included:

Lawsuit: a construction suit was brought in the Supreme Court of NSW to clarify whether the gift was valid and enforceable, and whether the clause gave sufficient authority for the executors to deal with company assets.

Legal and accounting costs: Mr Retallack’s direction allowing his executors to ‘manipulate the assets of my estate’ resulted in significant costs associated with obtaining legal and accounting advice about tax and stamp duty consequences of different scenarios. The court even censured the executors and their professional advisors for treating the estate like a ‘milch cow’.

Adverse tax consequences: Transferring the Bega property from the company to the deceased daughter would likely trigger a capital gains tax (CGT) event. Since the asset was not part of the deceased’s estate, the CGT death exemption under s 128-15 of the Income Tax Assessment Act 1997 did not apply. Any transfer from the company to the deceased’s daughter would be treated as a sale, potentially triggering tax at the company level.

Pragmatic approach

Ultimately, the Court held that the manifest intention of the deceased was clear, namely that the daughter was to receive the Bega property, and that manifest intention could be given effect to because his executors had been given control of his shares in the company.

‘Where a testator conveys to his executor a direction to reduce into possession an asset not owned by the testator and the executor is armed by the testator with the power to get it in, he is bound to do so and to deal with it by way of disposition in the way that the testator directs.’

Although the court was able to adopt a common-sense approach to the problem in this case, it should be said that the problem could have been avoided without significant expense and waste of time if Mr Retallack had gifted his shares in the company concerned rather than its assets.

Practical guidance for business owners

If you’re planning to benefit family members using company-held assets, consider the following:

Review ownership structures: Check whether the assets you want to leave are personally or company owned.
Use corporate mechanisms: Instead of gifting the asset, gift shares in the company or appoint the intended person as successor director or shareholder through a shareholders’ agreement or constitution.
Address control succession: Use separate documents to manage succession of control such as appointor powers under a trust or shareholder agreements in a company.
Be careful with executor powers: Broad clauses directing executors to “restructure” or “transfer” company assets can be legally ineffective or expose the estate to claims of breach of duty.
Get professional advice: A tailored estate plan involving private companies should include legal, accounting, and tax input to minimise disputes and tax leakage.

Final thoughts

Owning a company doesn’t mean you own its assets. Estate planning for private business owners requires careful consideration of legal structures, control mechanisms, and tax outcomes. If you want your estate planning to achieve what you intend, start with a clear understanding of what you own, and what you don’t.

What about gifting trust assets in your Will? Learn more here.

How we can help

At ADLV Law, we work with business owners to design estate plans that respect corporate and trust structures while ensuring family members are provided for. We can help with:

Structuring effective share succession and control mechanisms

Drafting Wills that align with company constitutions and trust deeds

Navigating tax and CGT implications

Avoiding costly Will challenges and estate disputes

Call us on 1300 654 590  or  email us and connect with a specialist who can help you.

The information contained in this post is current at the date of editing – 17 February 2026.

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