In May 2017 we brought to your attention major legislative changes to the Duties Act 1997 (NSW) and Land Tax Act 1956 (NSW) that would result in your family trust attracting additional stamp duty on real estate purchases and additional annual land tax on real estate holdings. Under these two acts, foreign trusts acquiring NSW residential land must pay Surcharge Purchaser Duty of 8% (in addition to the purchaser duty payable on the purchase) and foreign trusts who own NSW residential land must pay Surcharge Land Tax of 2% (in addition to 1.6% land tax rate).
As to every discretionary trust has a class of beneficiaries which includes foreign persons, every discretionary trust is a ‘foreign trust’ as defined under the Foreign Acquisitions and Takeovers Act 1975 (Cth).
For those of you that acted quickly and instructed us to amend your trust deeds so that the Surcharge Purchaser Duty and Surcharge Land Tax did not apply to your family trusts, we would like to bring to your attention that you now need to provide evidence to Revenue NSW by 31 December 2019 that your family trusts exclude foreign persons.
You can provide evidence to Revenue NSW by lodging a return on www.revenue.nsw.gov.au and attaching your trust deed and the Deed of Variation to your family trust.
If you do not provide evidence to Revenue NSW by 31 December 2019, Revenue NSW may assess your family trust as a foreign trust and the trust will be liable for Surcharge Land Tax for future and prior years.
Please complete and submit the attached order form to instruct Antunes Lawyers to amend your deed to avoid being defined as a ‘foreign trust’ or contact us to make the necessary amendments to your trust deed.
This amendment to your trust deed will not trigger stamp duty or capital gains tax.
Please contact Tim Arvanitis or Stefan Stojkovic at Antunes Lawyers if you have any questions or if you wish to discuss further on 02 9964 0499.