NSW Land Tax Assessments Now include an additional 2% surcharge for land tax

Revenue NSW (formerly the Office of State Revenue – NSW) has started to issue land tax assessments that now include the additional 2% foreign person surcharge land tax amount to trustees

Revenue NSW now deems that a discretionary trust is a foreign trust because of the State Revenue Legislation Further Amendment Bill 2020 (Bill).  In order to avoid being treated as foreign trust, the trust deed needs to irrevocably exclude any current or future foreign persons from being a beneficiary under that trust.

Transitional relief exists for trustees to amend and update the deeds before midnight 31 December 2020 to exclude foreign persons from being trust beneficiaries.

While the Bill specifically mentions discretionary trusts being caught by these changes, it may also impact other types of trust structures (e.g. testamentary trusts).

What Action is required

Trustees should review any discretionary trust deeds where residential land is held in NSW, to ensure they are not caught by the changes introduced in the Bill. Please do so before midnight on 31 December 2020.

Rockwell Bates are highly experienced in assisting clients in understanding their land tax obligations as well as reviewing and amending trust deeds.

For more information on what Rockwell Bates can do to assist you, please contact our Tax and Advisory Team.

Adam Levine

With Over 25 years private practice and investment banking experience, coupled with experience gained in the private investment sector, Adam is one of Australia’s leading lawyers in the area’s of Private Equity, Mergers & Divestments and Deal Structuring.

Managing Director