28/08/2018

Trusts that hold or intend to hold residential property in New South Wales, Victoria and Queensland may be liable to surcharge land tax and/or surcharge purchaser duty if any of their beneficiaries qualifies as a ‘foreign person’, regardless of the specified law set out in the trust deed.

The surcharge is in addition to any land tax the trust may already be paying.

This applies not only to unit trusts where one or more unitholders qualify as a foreign person but also to discretionary trusts if any of their potential beneficiaries meets that definition (even if none of the beneficiaries who actually receive distributions from the trust are foreign persons).

Some States, such as NSW, have granted a 6 month grace period to allow trust deeds to be amended to exclude foreign persons as beneficiaries.

A copy of the variation documentation will need to be submitted to the relevant revenue office for the purpose of the assessment.

We are able to assist by preparing the necessary documentation to vary your trust deed in a way which complies with the relevant State Revenue Office and avoid the application of the surcharge in the future.

For further information, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222 or info@townsendslaw.com.au to see how we can assist.