Don't let your trust fall prey to the surcharge land tax

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 of the State set out in the trust deed which governs the trust. 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 unitholder qualifies as a foreign person but also to discretionary trusts if any of its potential beneficiaries meets that definition (and even if none of the beneficiaries who actually receive distributions from the trust are foreign persons).

Some States, such as NSW, have granted a six (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 purposes of the assessment.

If you require assistance in varying your trust deed to avoid the application of the surcharge, please contact us on 02 8296 6266 or email info@supercentral.com.au.