New provisions were introduced which took effect for and from the 2020-21 financial year which changed the way land is assessed for land held in trust.

Land held on trust under a discretionary, fixed or unit trust is subject to a higher set of rates (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 under the How is land tax calculated? section for more information.

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 as trustee of a fixed trust or unit trust scheme that is grouped with one or more related corporations and land tax is assessed in accordance with section 13J of the Land Tax Act 1936.

Notification of land held on trust

A trustee must notify RevenueSA within one month of acquiring any land on behalf of a trust.

Upon introduction of the new trust provisions in the 2020-21 financial year, trustees were required to notify RevenueSA of all land held on behalf of a trust by 31 July 2020, with the following exceptions:

• the trustee had previously notified RevenueSA that they are a trustee of land for the purposes of the Land Tax Act 1936 and have received confirmation from RevenueSA that RevenueSA has recognised that the owner holds the land in their capacity as trustee of a trust; or
• all land held on behalf of the trust was subject to an exception or exemption from land tax, however if there is a change in circumstances and any of that land is no longer eligible to receive an exception or exemption from land tax, the trustee must notify RevenueSA of the land it holds on trust within one month of the land no longer being exempt.

To advise of land held on trust or of changes to land held on trust please complete the online Trust Notification Advice.

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 and the legal ownership of the land stays the same after the disposal;
• If land that was held on trust as at midnight, 30 June 2020 that was exempt at that time loses its exemption (and notification of the trust has not previously been provided), the trustee must provide notification that that land is held on trust;
• 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 RevenueSA where related corporations between them acquire more than 50% of the beneficial interests/units in the trust.
  • A corporation was required to 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 for an estate of a deceased person who held land in South Australia at the time of their death; or
• where the grounds for an exemption (or partial exemption) from land tax end.

To advise of land held on trust or of changes to land held on trust please complete the online Trust Notification Advice.

Failing to notify within the required time limit may give rise to a tax default under the Taxation Administration Act 1996. When this happens, the trustee may be liable for interest and penalty tax on the additional amount that would have been assessed if the trustee had notified within the required time.

Nomination of beneficiaries/unitholders

The trustee may nominate:

• all the beneficiaries for a fixed trust; or
• all the unitholders for a unit trust.

Prior to 31 December 2021, trustees had the option to nominate a designated beneficiary for a discretionary trust that held land as at midnight, 16 October 2019.

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 of the land tax assessed in the trust ownership. If there was no land tax liability in the trust ownership (for example, 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.

To advise of land held on trust or of changes to land held on trust please complete the online Trust Notification Advice.

Discretionary trusts

The opportunity for trustees to nominate a designated beneficiary for a discretionary trust that held land as at midnight, 16 October 2019 closed on 31 December 2021.

RevenueSA cannot accept late notices of designated beneficiaries. The Commissioner does not have any discretion to consider a nomination of a designated beneficiary lodged after 31 December 2021.

The nominated designated beneficiary had to:

• 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
• be verified by statutory declaration that they consent to being the designated beneficiary of the trust.

The land subject to the trust as at midnight, 16 October 2019 would be assessed at the general land tax rates.

Only one beneficiary could 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 could have nominated themselves as the designated beneficiary if they are a natural person.

Any land that becomes subject to any discretionary trust on or after 17 October 2019 will be assessed at the higher trust land tax rates.

A designated beneficiary may be substituted if the designated beneficiary dies or becomes incapacitated, or if a marriage, de facto or domestic relationship breaks down irretrievably and the designated beneficiary will no longer be the beneficiary of the trust,

The designated beneficiary can also be withdrawn at any time.

You can substitute or withdraw the nominated beneficiary using the online Trust Notification Advice.

See the Guide to Legislation: Land Tax - land held on trust for more detailed information.

Fixed trusts

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

Nominate all the beneficiaries using the online Trust Notification Advice.

The nomination of beneficiaries can be withdrawn at any time.

Where the beneficiaries of a fixed trust changes, and proper notice is provided to RevenueSA of that change, RevenueSA will accept the change and will update the beneficiaries of the fixed trust for the purposes of assessing the land tax for the financial year following the change.

Withdraw beneficiary nomination or substitute beneficiaries using the online Trust Notification Advice.

See the Guide to Legislation: Land Tax - land held on trust for more detailed information.

Unit trusts

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

Nominate all the unit holders using the online Trust Notification Advice.

The nomination of unitholders can be withdrawn at any time.

Where the unitholders of a unit trust changes, and proper notice is provided to RevenueSA of that change, RevenueSA will accept the change and will update the unitholders of the unit trust for the purposes of assessing the land tax for the financial year following the change.

Withdraw beneficiary nomination or substitute unitholders using the online Trust Notification Advice.

See the Guide to Legislation: Land Tax - land held on trust for more detailed information.

Assessment of land held on trust

Discretionary, fixed or unit trust

Land held on trust under a discretionary, fixed or unit trust is subject 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 under the How is land tax calculated? section for more information.

Discretionary, fixed or unit trusts –beneficiaries/unitholders nominated

Where the beneficiaries/unitholders have been nominated, land tax is assessed at the general rates and in a 2 stage process.

The opportunity to nominate a designated beneficiary for a  discretionary trust that held land as at midnight, 16 October 2019 closed on 31 December 2021

RevenueSA cannot accept late notices of designated beneficiaries. The Commissioner does not have any discretion to consider a nomination of a designated beneficiary lodged after 31 December 2021.

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 for more detailed information.

See the Guide to Legislation: Land Tax - land held on trust for more detailed information.