In this episode of the DBA Lawyers Podcast, Bryce Figot, Special Counsel and Shaun Backhaus, Lawyer, discuss the foreign purchaser duty and land tax surcharges that have been adopted by various states and territories.

The foreign purchaser duty and land tax provisions are additional surcharges that, broadly, are applied to foreign persons purchasing residential property in Australia. These provisions capture foreign natural persons, foreign trusts, and foreign corporations. The provisions are complex and many may consider they are not caught when in fact they are given the breadth of the legislative provisions.

Discretionary trusts are especially at risk of being caught under these taxes due to the broad scope of the definition of beneficiaries in most trust deeds.

Bryce and Shaun discuss the nature of the additional taxes and some of the traps that may unwittingly catch out discretionary trusts.

When establishing a discretionary trust, you should only order from a quality supplier as many document suppliers are not keeping up to date with these developments. Existing discretionary trusts may consider amending their trust deeds so that they are not caught out paying these additional taxes.

DBA Lawyers can assist by drafting discretionary trust deeds and amending existing discretionary trust deeds to exclude these foreign persons. Unless there is a special wording to the deed exclude foreign beneficiaries, as broadly defined in the relevant State or Territory, these taxes are likely to apply.

For more information about the DBA Lawyers discretionary trust deed, please click here.

For a chance to have your SMSF query addressed on the show, please send your questions to [email protected].

Related articles and links below.

DBA Lawyers’ discretionary trust — managing the extra duty and land tax surcharges on foreigners

Do Foreign purchaser duty surcharges apply to SMSFs?

Your discretionary trust may unwittingly be subject to extra duty or land tax

DBA Lawyers Discretionary Family Trust

DBA Network

DBA Lawyers

Hosts (in order of appearance): Bryce Figot, Special Counsel and Shaun Backhaus, Lawyer

4 October 2020