Trusts - State Revenue Legislation Further Amendment Act 2020 (NSW)

Just received a note from my solicitor....


"The New South Wales government introduced legislation (State Revenue Legislation Further Amendment Act 2020 (NSW) whereby virtually all discretionary trust may be deemed to be foreign trusts, regardless of whether they have any foreign connection or not.

This has two significant consequences:

1. If the trust purchases any residential property in New South Wales, it will pay a surcharge of 8% on top of the normal stamp duty paid on the purchase; AND
2. while New South Wales residential property is held by the trust, the trust will pay land tax surcharge of 2% per year, in addition to the normal land tax payable.

However, these will not apply if the trust deed is amended prior to 31 December 2020 to provide that there can be no distribution to a foreign person, and to provide that such provision cannot be revoked.

Even if your trust does not currently hold residential property, it may do so in the future, as trust usually last for many years. So, it is strongly recommended that your trustee be reviewed and amended if necessary"




Perhaps some of the qualified resident legal experts here may wish to add some comments ....

 

nothing new, this was introduced about 2 years ago. I have been doing a lot of trust amendments.
still many are not aware of it though, but the Revenue NSW has been sending out letters to all trustees owning land in NSW - that they know about.

 

Revenue NSW says it received assent 24 June 2020 .... but the far more important date appears to be the Dec 31 2020 deadline to make the necessary amendments.

State Revenue Legislation Further Amendment Act 2020

 

This amendment is further amendments to those introduced in 2017. I think there was a tightening up on the land tax side so that foreign persons excluded is now unable to be later amended to re-include them.