The New Zealand Court of Appeal has recently considered whether the presumption of advancement still applies in New Zealand to money or property given by adults to their children so that it is treated as a gift unless the evidence shows otherwise.
In A–Wang Liao & anor v Pei-Ya Liao [2026] NZCA 250 Pei-Ya Liao (the daughter) bought a residential property in Auckland (the Property) as an investment, and her parents contributed 10% of the purchase price. The daughter funded the balance with her savings and a bank loan secured over the Property (which was registered in her name) and another property she already owned. Sometime later, her parents asked her to transfer the Property to them, saying that it had been purchased on the basis that it would belong to them and they would be the owners of it. The daughter refused to transfer the Property.
The parents filed court proceedings alleging that their daughter held the Property on trust for them and sought an order that the Property be transferred to them.
The Court of Appeal considered whether the presumption of advancement still applied in New Zealand. There are some relationships in which a voluntary transfer of property raises the presumption of advancement so that it is presumed that the person who transferred the property or money intended to make a gift to the transferee. Historically the relationships in which the presumption of advancement arose were those of husband and wife or parent and child. Over time this has expanded to anyone standing in the place of a parent. It was argued by the parents in this case that the presumption should no longer be recognised as applying to adult children, whether dependent or independent. The Court of Appeal noted that the presumption of advancement in relation to adult children was still recognised in Australia and the United Kingdom, but no longer in Canada.
The Court of Appeal considered recent cases and concluded that they did not see any basis on which to depart from the longstanding recognition of the presumption of advancement to adult children in New Zealand. They stated that “[i]t reflects the unique relationship between parent and child and the fact that the emotional ties underpinning that relationship endure regardless of age. … It is the uniqueness of the relationship that justifies the presumption that parents who advance money to their children can be assumed, absent contrary evidence, to have intended to make a gift of that money.” This presumption can be rebutted by evidence to the contrary, such as evidence which shows that the money was intended to be repaid. The Court noted that if particular cultural considerations were relevant, evidence could be adduced to rebut the presumption.
This decision is a reminder that if a parent is voluntarily transferring money or property to their child, it is important to properly record whether it is a gift or a loan which needs to be repaid. Otherwise, if the evidence does not show otherwise, based on the current law, the presumption of advancement will apply and it will be presumed to be a gift.
