Where a discretionary trust owns or part owns a property in NSW, the trust deed must now be amended to specifically exclude non-citizens of Australia (“foreign persons”) as potential beneficiaries now and in the future. Without this amendment, the trust will be taken to be a “foreign person”, and accordingly charged a 2% additional surcharge on land tax. The amendment must be lodged with Revenue NSW by 31 December, so time is short!

You may have received notice of this requirement a while ago, amended your deed, uploaded it to NSW Revenue and thought you could pat yourself on the back for being super organised. HOWEVER, some of our clients have recently received letters from NSW Revenue asking them to prove that the deed meets the requirements AGAIN (ie, upload the amendment again) before 31 December. So if you receive correspondence from NSW Revenue and think “I’ve already taken care of that”, don’t ignore it! Always best to check again, and please ask us for help.

While this law currently only relates to any Australian trusts that own property in NSW, it’s surely only a matter of time before other states follow suit, so it’s worth thinking about amending your deed in advance.