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LAND TAX ACT 1956 - SECT 5D
Surcharge land tax--discretionary trusts
(1) The trustee of a discretionary trust is taken to be a foreign person in
that capacity for the purposes of section 5A if the trust does not prevent a
foreign person from being a beneficiary of the trust.
(2) If a discretionary
trust prevents a foreign person from being a beneficiary of the trust, the
trustee is not in that capacity a foreign person for the purposes of
section 5A.
(3) A discretionary trust is considered to prevent a
foreign person from being a beneficiary of the trust if (and only if) both of
the following requirements are satisfied-- (a) no potential beneficiary of the
trust is a foreign person (the
"no foreign beneficiary requirement" ),
(b) the terms of the trust are not
capable of amendment in a manner that would result in there being a
potential beneficiary of the trust who is a foreign person (the
"no amendment requirement" ). Note--: Under the transitional arrangements for
this section in Schedule 2 to the Principal Act, the no amendment requirement
does not apply to a trust that satisfies the
no foreign beneficiary requirement immediately before the commencement of this
section.
(4) A person is a
"potential beneficiary" of a discretionary trust if the exercise or failure to
exercise a discretion under the terms of the trust can result in any property
of the trust being distributed to or applied for the benefit of the person.
Note--: A potential beneficiary is not limited to persons named in the trust
instrument and extends to the members of any class of persons to whom or for
whose benefit trust property can be distributed or applied pursuant to the
discretions of the trust.
(5) For the removal of doubt, a person is not a
potential beneficiary of a discretionary trust if the terms of the trust
prevent any property of the trust from being distributed to or applied for the
benefit of the person.
(6) In this section,
"property" includes money, and a reference to the distribution or application
of property includes a reference to the payment of money.
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