If you have a discretionary trust that holds (or may one day hold) real estate, then you need to be aware of a recent change in the law.
The NSW Government has introduced a new rule for discretionary trusts which means that if the deed governing your trust does not include clauses excluding foreign persons from being or becoming beneficiaries, or if the deed is not amended to include such a clause by 31 December 2020, then the trustee will be considered “foreign”. This additional clause must be a permanent part of the trust deed.
Trusts that do not exclude foreign beneficiaries by 31 December 2020 will be liable for surcharge stamp duty (presently 8% of the market value of the property) on newly bought residential property and surcharge land tax (currently 2% of the value of the land) for any residential property owned by the trust.
Fox & Staniland can work with you to ensure your trust deed is compliant with this new rule in order to avoid unnecessary expense. This may also be an ideal time to review your trust deed more generally, particularly in respect to succession to future managers of the trust.