New provisions were introduced in the 2020-21 financial year in relation to how land held on trust is assessed for land tax.

Land held on trust under a discretionary, fixed or unit trust is subject to the trust surcharge which is a higher rate of land tax (trust land tax rates) and a lower land tax threshold (currently $25,000).

Some trusts may be excluded from the trust rate of land tax and may instead be taxed at the general rate of land tax.

See the rates of land tax section for more details.

Trusts excluded from the surcharge

The trust surcharge does not apply to land held by:

• an excluded trust, such as a concessional trust, a superannuation (super fund) trust, or an administration trust for a deceased estate;
• an implied, constructive or resulting trust;
• public unit trust schemes, being either a listed trust or a widely held trust; or
• a corporation that is grouped with one or more related corporations and land tax is assessed in accordance with section 13J of the Act.

Notification of land held on trust

The trustee must notify RevenueSA by 31 July 2020 of any existing land held on trust. For land acquired after 1 July 2020, the trustee must notify RevenueSA within one month of the trust acquiring the land.

Trustees can notify that land is held on trust through RevenueSA Online when completing their land holding declarations.

Other notification requirements

There are also requirements for the trustee to advise RevenueSA within one month when any of the following occur:

• they become a trustee of land, or of additional land (if already a trustee);
• they dispose of any land in the trust if the legal ownership of the land stays the same after the disposal;
• anything that results in the trust changing category, for example, a discretionary trust becomes a fixed trust or a unit trust scheme becomes a public unit trust scheme;
• the beneficial interest(s) of a fixed trust, or unit holdings of a unit trust, changes where the relevant notice is in force;
• where a corporation that is the trustee of a fixed trust or a unit trust scheme becomes, or other related corporations between them become, the owner of more than 50% of the total beneficial interests in land in trust (for a fixed trust) or more than 50% of the total number of units held by the unitholders in the scheme (for a unit trust).
  • The trustee must also notify Revenue SA where related corporations between them acquire more than 50% of the beneficial interests/units in the trust.
  • A corporation must notify RevenueSA by 31 July 2020 if this ownership exists at 30 June 2020.
• the administration of a deceased estate that includes land in South Australia is completed;
• probate is granted or letters of administration are issued; or
• where the grounds for an exemption (or partial exemption) from land tax end.

Nomination of beneficiaries/unitholders

The trustee may nominate:

• a designated beneficiary for a discretionary trust;
• all the beneficiaries for a fixed trust; or
• all the unitholders for unit trusts.

If beneficiaries/unitholders are nominated, the land will be assessed at the general land tax rates.

However, nominating a beneficiary/unitholder may have land tax implications for the beneficiary(ies)/ unitholder(s). Land will be firstly assessed in the trust ownership using the general land tax rates, then the land, or the beneficiary/unitholder’s share of the land, will be assessed in the beneficiary/unitholder’s individual ownership combined (aggregated) with any other land they own, or partly own. A deduction will be applied to the beneficiary/unitholder’s Land Tax Assessment, which equates to the proportion of land tax on their share in the trust ownership. If there was no land tax liability in the trust ownership (e.g. combined site value of all land in the trust ownership was below the taxable threshold) no deduction will apply in the beneficiary/unitholder’s ownership.

Trustees can nominate beneficiaries/unitholders through RevenueSA Online when completing their land holding declarations. If you are unable to access RevenueSA Online, please email: landtaxreform@sa.gov.au.

Discretionary trusts

Trustees have until 30 June 2021 to nominate a designated beneficiary for a discretionary trust. The designated beneficiary must:

• be a natural person;
• have been a beneficiary of the trust as at midnight 16 October 2019;
• be over 18 years of age at the date of nomination; and
• verify by statutory declaration that they consent to being the designated beneficiary of the trust.

Only one beneficiary can be nominated for this type of trust. If all the beneficiaries of the trust specified in the trust documentation are under 18 years old, the trustee can nominate themselves as the designated beneficiary if they are a natural person.

Trustees will only be able to nominate a designated beneficiary for land tax purposes for land they owned as at 16 October 2019, with land being assessed at the general land tax rates.

Any land that becomes subject to any discretionary trust after 16 October 2019 will be assessed at the higher trust land tax rates

Fixed trusts

Trustees have the option to nominate all beneficiaries of a fixed trusts.

Unit trusts

Trustees have the option to nominate all unitholders of a unit trusts.

Assessment of land held on trust

Discretionary, fixed or unit trust

Land held on trust under a discretionary, fixed or unit trust is subject to the trust surcharge which is a higher rate of land tax (trust land tax rates) and a lower land tax threshold (currently $25,000).

See the rates of land tax section for more details.

Discretionary, fixed of unit trusts – beneficiaries/unitholders nominated

Where the beneficiaries/unitholders have been nominated, land tax is assessed at the general rates and in a two stage process.

Trusts excluded from the surcharge

Land held by these types of trusts will be assessed at the general land tax rates.

See the Land held on trust page and the Land Tax Guide to Legislation: Changes  - Joint Owners, Land Held on Trust and Related Corporations for more detailed information.