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  • Dates are tricky.
  • What applies in one situation does not necessarily apply in another.
  • If the issue is tax related – talk to the accountant!

It’s getting on for Christmas and you’ve had a hell of a rush – people seem to think the world will come to an end on Christmas Eve.

Land Tax and foreign beneficiaries?

A month or so ago, Mary asked you to set up a discretionary trust to purchase a residential property as an investment, which you did using your standard precedent.

You explained to her that having the property in a discretionary trust meant there is no threshold for land tax – meaning 1.6 per cent on the full land value, but Mary had her reasons so it was all OK.

But then you watched a webinar and realised there would be an extra four per cent surcharge if Mary’s trust deed did not specifically exclude foreign beneficiaries.

‘OMG!’ You think – ‘I’ll have to get onto it when I’m back at work in January – although I’ll have until 30 June to fix it’.

No, no, no! The cut-off date for land tax is 31 December. Unless the clause is in the trust deed before that date, the four per cent surcharge will apply for the coming year.

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