NSW Discretionary Trusts: Still time to act to avoid retrospective additional duty and land tax surcharges

Insights by Andrew Henshaw

NSW Discretionary Trusts: Still time to act to avoid retrospective additional duty and land tax surcharges

On 22 October 2019, the New South Wales (NSW) government introduced legislation (State Revenue Legislation Further Amendment Bill 2019 (NSW) (Proposed Legislation)) which would deem all discretionary trusts to be ‘foreign trusts’, unless the terms of the trust explicitly prevented a foreign person from being, or ever becoming, a beneficiary of the trust. This is referred to as the Foreign Beneficiary Exclusion.

Under the Proposed Legislation, discretionary trusts which did not contain the Foreign Beneficiary Exclusion were given until 31 December 2019 to amend their deeds to include the Foreign Beneficiary Exclusion.

Due to the failure to pass the Proposed Legislation in an a reasonable time, and a last minute ‘legislation by media release’ by Revenue NSW, trustees of discretionary trusts that own residential property in NSW (and who have not already taken action) now have a final window of opportunity to avoid retrospective duty and land tax. It is strongly recommended that affected trustees consider taking immediate action to amend their trust deeds.

Insight Authors…

ANDREW HENSHAW

Director

Andrew leads Velocity Legal’s Sydney practice.

If you are in a fight with the ATO or looking to restructure your business, you should have Andrew in your corner. Andrew is passionate about getting wins for his clients, solving difficult legal issues, and giving his clients clear and confident guidance. Andrew is a Chartered Tax Advisor, holds a Masters of Law from the University of Melbourne and is the author of ‘Life, Death and Taxes’. Andrew is also a passionate snowboarder and is always up for the next adventure in life.

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Level 49, 360 Elizabeth Street,
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Level 10, 580 George Street,
Sydney NSW 2000

Level 49, 360 Elizabeth Street,
Melbourne VIC 3000

Level 10, 580 George Street,
Sydney NSW 2000

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