Discretionary trust & NSW land tax

Hi, i need advise of people who know or been on my position before. 2 years ago i was advised by my lawyer and my accountant opened a Trust so i can put my investment property on. Unaware that has so many different trust types at that time, we purchased the property on the discretionary trust and now 2 years later i got MASSIVE land tax bill.
Forwarded to my lawyer and accountant who at that time were sure its mistake and they can sort things out, so they can today let me know that i have to pay all acquired land tax and keep paying, or dump the trust(i purchased 2 other properties on that trust later on) and pay again stamp duty or sell the property (no way as its future development)

Do you know how to go out of this with less fees and less painful?

 

sounds like they might be negligent? Who did you contract with to set up the trust?

 

Thanks for replying
My accountant was setting up and lawyer got it checked and both were aware why we are opening the trust. Now i get the same response from both looks like they dont want to deal wit this and im struggling to find any good info of this stuff up online

 

Who did you pay?

 

Accountant

 

Then that's the one you contracted with probably.
Since land tax can only be advised on by lawyers you may not have a claim.

But seek legal advice

 

Where is the property ? NSW ?

NSW has had a special approach to trusts that are not a FIXED unit trust for a long long time. It goes back to the 2006 budget. The NSW Govt introduced the concept of a special trust which differs from that of a fixed unit trust if that trust deed contained compliant clauses and rules. Dsc trusts are special trusts. They have a $0 threshold and will be subject to land tax on ALL the land value. There are also potential issues concerning land tax surcharge which will also soon also require amendmnet to further restrict and change the term s of the trust.

They were "sure its a mistake"? I would be seeing a new lawyer and seeking to progress a claim for professional negligence. I dont know what is more incompetent - The accountant, the lawyer or both of them thinking it could be a mistake.

Basic explanation about different types of trusts : Trusts

 

Did you have any contact with the lawyer?

 

Good read - a trust is considered a foreign person if it doesn't specifically exclude foreign persons as beneficiaries. Pretty onerous admin stuff.

 

Yes. He is still my lawyer and been in the past 10 years

 

Hi. Yes in NSW. Yes they thought its mistake and tried to fight it with NSW revenue office

 

Its just a mistake. Negligence. If the lawyer set up the trust for you or advised you their insurance should cover this. If it was the accountant then they would not be insured as this is legal work.

 

It is a mistake - on their part. The law is pretty clear on this.