The 2016 NSW Budget introduced a surcharge land tax (land tax surcharge) to be paid by foreign persons who own residential land. The State Revenue Legislation Further Amendment Act 2020 (the Act) received assent on 24 June 2020. This Act overrides any previous advice that may have been given. The Act amends the Land Tax Act 1956 and the Land Tax Management Act 1956 to clarify that a trustee of a discretionary trust is foreign if the terms of the trust do not prevent a foreign person from being a beneficiary of the trust.
In order to avoid any surcharge liabilities, new and amended trust deeds will need to irrevocably exclude current, or future foreign beneficiaries from receiving trust distributions. Transitional provisions allowing amendments to be made to exclude foreign beneficiaries are now in place and must be made and executed by midnight 31 December 2020. All previously completed declarations are no longer valid.
If you do not complete the declaration and supply a copy of your complying trust deed, you may be liable for a land tax surcharge. Revenue NSW may commence an investigation and an assessment notice may be issued, and interest and penalties may be applied.
Need Help?For any assistance with respect to your land tax liability whether as an individual, company, trustee or beneficiary, please contact Quinn Lawyers who can assist you with compliance with your land tax obligations or submit an online enquiry.
For more on land tax, importantly, concession, read the article: Land tax – Concessions Available.