Discretionary trusts with the potential for foreign beneficiaries and which hold residential land in NSW will be subject to an additional stamp duty of 8% and an additional yearly land tax of 2%.
Consequently, amendments to discretionary trust deeds that exclude potential foreign beneficiaries need to be made by 31 December to avoid a deed being automatically subjected to the additional stamp duty and tax from 1 January 2021.
The additional surcharge purchaser duty of 8% and surcharge yearly land tax of 2% are payable on residential land held by a foreign person and payable in conjunction with the general rates of duty and land tax. The trust will be deemed as held by a foreign person if the deed does not specifically and irrevocably prevent a foreign person from being a beneficiary of that trust. After amendment, the deed should be submitted to NSW Revenue for the record.