Family trusts and other discretionary trusts (including those established under a will) can be liable to pay surcharge land tax, which is currently an additional 2% of the unimproved value of the land, if the trust document does not expressly state;

                1. no potential beneficiary of the trust can be foreign persons; and
                2. the terms of the trust must not be capable of amendment in a manner that would result in a foreign person being a potential beneficiary.

Land tax is levied on 31 December each year, so we suggest that it is a good time to check your trust deeds so that they can be updated beforehand.

Surcharge stamp duty also applies to purchases by trusts that do not contain the ‘foreign person’ exclusion.

Please note that these penalties can apply if the trust document is not amended, despite that fact that there are no foreign persons involved in the trust.

 

Call Manny Wood for Accredited Specialist advice regarding your estate planning.

This article is intended to be for information and educational purposes only and cannot be relied upon as legal advice. The information may not apply to your circumstances or to your particular situation. If you need specific advice or you have any questions, we welcome you to contact us directly.