If you are currently holding NSW property in a Unit Trust or ‘NSW Fixed Property Trust’, then you may be at risk of paying up to AUD6,912 p.a. in NSW Land Tax after the 31st December 2015.
Below, you will find an outline of the changes and the impact that this may mean for investors in particular, how some Unit Trusts and NSW Fixed Property Trusts will no longer be able to claim and receive the NSW Land Tax Threshold benefit causing adverse financial implications.
Don’t delay, act now. Trust deeds must be compliant by 31st December 2015. If you think that this may apply to you then contact your Chan & Naylor Client Manager or Accountant who will be happy to assist you further.
The Land Tax Management Act 1956 (NSW) was amended by the State Revenue Legislation Amendment Act 2014 (NSW) which received assent on 20 May 2014 and commenced to be effective from that date.
As a result of this landmark legislative amendment, presently, a Unit Trust, or a ‘NSW Property Fixed Trust’ can only be considered for a NSW Land Tax Threshold benefit (for the purposes of this act) if it has a single class of unit, being one of only many requirements in the deed to trigger the threshold benefit.
Unit Trusts or ‘NSW Fixed Property Trusts’ that are specifically used to receive the NSW Land Tax Threshold benefit, and currently have more than one class of unit, will require an amendment to comply with current legislation to guarantee eligibility for the Tax-free Land Tax threshold for the 2015 Tax year.
Unit Trusts and NSW Fixed Property Trusts which currently hold property in NSW, may require a Deed Amendment to comply with these changes before the 31 December 2015.
Fortunately, Trust holders affected by this change can have their Deed Amended to ensure compliance.
It is however, vitally important that Deed Amendments are executed prior to 31 December 2015; the same being the deadline when NSW Land Tax payments fall due.
Failure to comply before this date may result in Land Tax payments of up to AUD 6,912 p.a.
The (Frequently Asked) Questions:
How and when does this impact me?
Should your Trust be non-compliant as at 31 December 2015, you may liable to the State Revenue Office of up to AUD6,192 in NSW Land Tax.
What do I need to do to ensure I can claim the NSW Land Tax Benefit?
If you currently hold property in NSW in a Unit Trust or NSW Fixed Property Trust specifically for the NSW Land Tax benefit, then you may need to have a Deed Amended so that your Trust Deed will be compliant with the current NSW Land Tax legislation.
If you think you may be impacted by the latest Legislative change, or unsure about how it impacts you specifically, then we strongly advise that you contact your Chan & Naylor Client Manager, or Accountant, directly.
How do I get my Deed Amended?
For eligible Trust Deeds, Chan & Naylor offers a pre-paid Deed Amendment service for eligible, Unit Trust and NSW Fixed Property Trust Deeds.
How much does a Deed Amendment cost?
We recommend that you speak with your Client Manager or Accountant to discuss further.
Please note: not all Trust Deeds are eligible for this service and should that be the case for you, in some instances a special upgrade or Deed Conversion may be required, which is more complex in nature and thus priced on application.
Should you have any further questions about the NSW Land Tax changes to Legislation, please don’t hesitate to contact your Chan & Naylor Client Manager or Accountant in the first instance.
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Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.