In order to avoid foreign land tax and duty surcharges, the trust deed needed to be amended before midnight on 31 December 2020 to exclude all foreign persons as eligible beneficiaries, and prevent any amendment to the exclusion of foreign persons as beneficiaries, so that the exclusion is permanent and irrevocable.

As previously reported, the trust deed needed to be amended to exclude foreign persons if it had acquired any residential property in NSW on or after 21 June 2016 or held a residential property in NSW at any time after 21 June 2016 regardless of when it was acquired.

In an online article, documentation provider SuperCentral warned that under the new surcharge laws in NSW, previous stamp duty or land assessments in relation to trusts that previously existed could be reassessed by Revenue NSW for foreign surcharge purposes.

As these trusts were already wound up and no longer in existence, SuperCentral noted that clients with these wound-up trusts did not have the opportunity to amend the deeds for foreign surcharge purposes.

While there is no formal public ruling on this issue, SuperCentral stated that Revenue NSW has informally advised that, in respect of discretionary trusts that have already been wound up, if none of the beneficiaries who received distributions were foreign persons, Revenue NSW will not reassess previous assessments for surcharge.

If any of the beneficiaries who received distributions are foreign persons, however, they will reassess if applicable for surcharge, it said.

“For relevant trusts, it is suggested that the evidentiary documents are submitted to Revenue NSW as soon as possible [including] evidence that the trust has been wound up, date of when the trust was wound up and a list of all beneficiaries who received the final distributions from the trust and their foreign status,” the document provider stated.