The NSW Legislative Council passed the State Revenue Legislation Further Amendment Bill 2020 on 18 June 2020.
This is particularly relevant if you own real estate in NSW or are likely to own real estate in NSW and have been thinking about leaving your property to your beneficiaries via a testamentary trust.
If this applies to you - then you you need to consider the effect of potential foreign persons surcharges when making your Will.
From 1 January 2021, if you leave NSW real estate in a testamentary trust, then the foreign person surcharge land tax (which is an annual tax) will apply to that property unless you have specifically and irrevocably excluded foreign persons from being eligible beneficiaries of the trust.
Likewise if the trust were to purchase any property, the foreign surcharge duty would apply.
This may not be particularly important if you are certain that none of the potential beneficiaries would be foreign persons, as in such a case an appropriate exclusionary clause can be included in your Will.
However, if your intended beneficiaries are foreign persons or even if they might marry foreign persons, then to allow your testamentary trust its greatest level of flexibility, (and subject to you not being a foreign person) you should consider executing your Will before 31 December 2020 (ie this year) - so that it is not caught in the changes that will apply from 1 January 2021.
Please contact Andrew Graham (email email@example.com ) or Jeremy Tooth (email firstname.lastname@example.org ) or phone our office on 02 6882 3133 if you wish to obtain advice on this issue or your succession planning.