Revenue NSW (formerly known as the Office of State Revenue) considers Family Trusts to be subject to the Foreign Persons Surcharge on Stamp Duty and Land Tax for any New South Wales residential property owned through the Trust.
Land Tax Assessments issued by Revenue NSW will include the 2% Foreign Person Surcharge on properties where the title indicates that it is owned by a Family Trust.
Trustees have been given six months (from the assessment date) to update the Trust Deed to remove Foreign Persons as beneficiaries. After the Deed is updated, the Trustee may apply to Revenue NSW for the surcharge to be refunded.
Briefly, Family Trusts may have to pay the tax first and then apply for a refund (after they had updated their Deed), regardless of whether there is any history of the Trust distributing to a Foreign Person.
Trustees should act quickly to ensure the Trust Deed is updated to remove Foreign Persons as potential beneficiaries. This includes Trustees who intend to purchase residential property in New South Wales.
For more information, contact us.