The State Revenue Legislation Further Amendment Bill 2019 (NSW) was introduced to State Parliament on 22 October 2019 to amend the legislation relating to duties and land tax. The Bill contains a number of significant changes, particularly in relation to discretionary trusts. It proposes that a trustee of a discretionary trust is taken to be a foreign trustee if the terms of the trust do not explicitly prevent a foreign person from being a beneficiary of the trust. Under the new amendments, a trustee will be liable for surcharge purchaser duty on the transfer of land as well as for land tax purposes if there is no such explicit prevention. In order to avoid being deemed a foreign trustee, the terms of the trust must exclude foreign persons as beneficiaries and the exclusion must be irrevocable. The Bill contains important transitional clauses, which provide for exemptions and refunds when discretionary trusts are amended before 31 December 2019. The transitional provisions have retrospective effect to the commencement of surcharge purchaser duty on 21 June 2016. This means trustees who have incurred a duty liability prior to the commencement of this Bill can obtain relief. Contact M+E for further information in relation to the proposed changes and their effect on you.
Important Changes Relating to Discretionary Trust Duties
Nov 19, 2019