Australia, July 30 -- New South Wales Land and Environment Court issued text of the following judgement on June 30:

1. The Applicant is Asan Construction Management Pty Ltd in its capacity as trustee for the Nikkhah Family Trust ("Trust").

2. The Tribunal has been asked to review surcharge land tax assessments for the 2018 to 2022 land tax years, which were issued to the Applicant by the Respondent, the Chief Commissioner of State Revenue.

3. Mr Peirouz Nikkhah is a director of the trustee company. He and his father have conducted a building construction business for many years together. Mr Nikkhah represented the Applicant in these proceedings.

4. The Applicant says:

1) No surcharge land tax should have been assessed, because no person who is a beneficiary of the Trust is a "foreign person";

2) The Trust has never paid or distributed any income or other amount to a foreign person. He and his father are both Australian citizens. They are the only ones who have received any distributions from the trust (income tax returns for all years were provided to prove this);

3) Land tax assessments were received, and paid, for all relevant years. But the Trust has been assessed again, for surcharge land tax:

a) on properties sold many years ago, before the surcharge land tax law was even introduced; and

b) despite having received land tax clearance certificates before selling the properties;

4) The Trust was never intended to include foreign beneficiaries;

5) The Respondent should accept that they had every intention to comply with the law and clearly sought to do so. They were not aware of, and had no expertise to understand, what was required to amend the Deed, and they relied on their lawyer to understand the law, and how to word the documents; and

6) This is not a case where there was ever any intention to do business with foreign persons. The Trust only ever did business in Australia, there was nothing foreign about their operations, and everything done was above board. They always thought they were doing the right thing, and understood there were no issues.

5. In short, the Applicant relied on professional advisers to ensure the Trust Deed was amended to comply with surcharge land tax obligations.

6. The Respondent says the Applicant was liable to surcharge land tax as the Trust was deemed to be a foreign person for the purposes of s 5D of the Land Tax Act 1956 (NSW) ("LTA") because the terms of the Trust did not irrevocably prevent foreign persons from being potential beneficiaries of the Trust at the relevant date. Nor is there a discretion under the statutory provisions to waive the requirement to pay surcharge land tax as assessed.

7. No penalties or interest were imposed on the Assessments before the Tribunal.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197bdf4ae3efa81a8d387bf5)

Disclaimer: Curated by HT Syndication.