Changes to Discretionary Trusts and Foreign Persons
In recent months we at Lynn & Brown Lawyers have been asked a number of times to amend trust deeds to add a new class of excluded person.
We have been asked to vary trust deeds to ensure that persons who are living overseas and not Australian Tax Residents are excluded from receiving a benefit under the trust. These changes are likely to have been requested due to changes in duties legislation in a number of States around Australia.
For example legislation introduced in New South Wales on 22 October 2019, if passed will require any discretionary trust from 31 December 2019 which holds land in New South Wales to pay a surcharge in addition to any land tax already payable if a person who is not an Australian Tax Resident can benefit from the trust.
This change to New South Wales legislation is important to our clients because it does not matter where the trust is based, only if the trust owns land in New South Wales.
Therefore if your trust owns real estate it may be worth considering if a variation exempting any person who is not an Australian Tax Resident from being a beneficiary is an appropriate variation to the trust.
Please contact one of our lawyers to discuss how we can amend your trust deeds to meet these requirements and eliminate them from paying a surcharge on land tax on land.
About the authors:
This article has been co-authored by Alyce Martin and Steven Brown at Lynn & Brown Lawyers. Alyce is an experienced Perth lawyer and a Senior Associate and practices in the areas of commercial law and probate & Wills. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.