Amending deed may avoid land tax surcharge
A recent revenue ruling in New South Wales has clarified the position of discretionary trusts and foreign ownership of land.
Legislation is in affect that applies a surcharge of stamp duty and land tax if the owner of the land in NSW is a foreign person.
The ruling states that a trust will be a foreign person for this tax if a beneficiary may be entitled to distributions and they are a foreign person.
In order to remove any unintended tax consequences, the Office of State Revenue will allow an amendment to trust deeds by 31 December 2020. This amendment will ensure that the trust will not meet the definition of a foreign person.