Does your Family Trust include Foreign Beneficiaries?

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Most family trust deeds, particularly those draughted by accountants in Sydney, incorporate a beneficiary list that extends beyond the immediate family, encompassing local relatives and overseas-based extended family members.

Are these potential extended family members foreign beneficiaries?

The fact that no distribution has been made to, or is intended to be made to, a foreign beneficiary does not help when determining whether the family trust is affected by this new “foreign person” legislation.

We have discussed this new “foreign person” legislation in previous newsletters, but to remind you what it is; it is legislation affecting stamp duty and land tax for family trusts buying or holding residential land in NSW, Victoria & Queensland.

These changes have resulted in additional stamp duty or land tax being imposed on “foreign persons” who purchase certain types of residential land.

The definition of “foreign persons” is different between the above states, but the definition results in any “foreign person” beneficiary of a family trust, potentially deeming the family trust to be a “foreign trust”.

If your family trust holds residential land or intends to purchase residential land and it has possible “foreign person” beneficiaries, please get in touch with us to discuss amending your trust deed to exclude “foreign persons” from being potential beneficiaries.

Kreston Stanley Williamson Team

*Correct as of January 2018

*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.

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