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TODAY'S LEGAL NEWS
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| ARTICLES AND ALERTS |
LAND TAX RELIEF FOR UNIT TRUSTS
Author: Valentina Misevska
Publish Date: March 1, 2007
The NSW Office of State Revenue has followed a Victorian case and determined that where a unit trust owns land, unless certain criteria can be satisfied, the trustee of the unit trust is considered to be the owner of the land for land tax purposes.
This means that the unit trust: will be assessed as a "special" trust rather than as a "fixed trust"; that the tax free threshold of $352,000 is no longer available; and that an additional tax of upto $6,000 may be payable.
As this is a significant change in the OSR's position, the NSW Government has indicated that anybody who wants to re-structure their unit trust so that it can obtain the benefit of the threshhold and become a "fixed trust" can do so up until
It will also refund any land tax which is paid for the 2006 land tax year prior to a successful restructure. The Federal Government has not offerred any concessions in respect of any Federal taxes that may apply on a restructure and accordingly taxes such as CGT will need to be considered.
It is extremely important that you do not assume that just because your unit trust has commonly been referred to by others as a "fixed trust" that it will be a "fixed trust" within the meaning of, and for the purposes of, the relevant land tax legislation and that you do not need to do anything. All unit trusts should be reviewed.
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