FIRB Hiccup

Discussion in 'Legal Issues' started by Tom Simpson, 25th May, 2020.

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  1. Tom Simpson

    Tom Simpson Well-Known Member

    Joined:
    13th Dec, 2016
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    186
    Location:
    Subiaco
    Hi Team

    I have a client who executed a contract last year in the name of a trust. One of directors of the trustee Pty Ltd (there are 2, husband and wife) is a citizen of another country which means this is viewed as a foreign investment when in a trust. If it were done in their personal names it wouldn't have been an issue.

    They're $100k plus into the deal having added value both cosmetically and via subdivision and settlement was supposed to be very soon. This will be delayed now indefinitely as the project has to go to the FIRB and there will be foreign investor tax etc applied which will impact the profit of the deal.

    Has anyone experienced similar or have any ideas how to tackle this one? @Terry_w is this something you've come across before?

    Thanks. Your time and input is much appreciated,
    Tom.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

    Joined:
    9th Jun, 2006
    Posts:
    30,841
    Location:
    Australia wide
    executed contract as trustee - trusts cannot contract.
    Can the deed be amended to exclude foreign beneficiary's? If citizen of another country that doesn't necessarily mean 'foreign person'.

    They should seek legal advice.