A person becomes foreign
A person must notify the Commissioner of State Revenue within 14 days if the person becomes a foreign person within 3 years of the acquisition of the land. The transaction will be reassessed as if at the time of the acquisition the person was a foreign person. The additional duty is payable within 90 days of the person becoming a foreign person.
The exception to this is a New Zealand citizen who is the holder of a Special Category visa (subclass 444) within the meaning of the Migration Act 1958 of the Commonwealth. If this visa holder temporarily leaves Australia, the visa is withdrawn, meaning that the person may become liable for FIDS.
To overcome this issue, the Commissioner has issued a determination under section 30M of the Act whereby a New Zealand citizen that temporarily leaves Australia will not be deemed a foreign person in the following circumstances:
- the person is a natural person; and
- the person was a citizen of New Zealand at all material times; and
- the person was in Australia at the time of the dutiable transaction and held a Special Category visa (subclass 444); and
- the person's principal residence was in Australia at all material times; and
- the person, within three (3) years of the dutiable transaction, temporarily leaves Australia for a period of three months or less within any calendar year.
For additional information see the Commissioner's Revenue Ruling Section 30M Discretion.
A person or trust is no longer foreign
A natural person or a discretionary trust that ceases to be foreign within 6 months of the dutiable transaction, may apply to the Commissioner, in writing, for a refund of the surcharge paid.
To make an application for a refund of the surcharge, you will need to complete this application form .
For a discretionary trust to be reassessed as no longer being foreign, it will be necessary that:
- at the time of the dutiable transaction, the trust was a foreign trust;
- under the terms of the trust, the trustee has a discretion in regard to the distribution of capital;
- the trustee in the capacity of trustee was the transferee in respect of the dutiable transaction;
- the trust deed of the trust has been amended, and as a result of the amendment, the trust is no longer a foreign trust;
- the amendment of the trust deed was undertaken within six months of the dutiable transaction, or within six months of 30 March 2020; and
- the trustee has not transferred or distributed all or any part of the property.
Under section 30L of the Act, a transferee who is a foreign person and who is liable for FIDs can apply to the Commissioner in writing to be considered non-foreign. The Commissioner has the discretion to either:
- determine that the person is not a foreign person; or
- refuse the application.
This discretion is
applied on a case by case basis, and a determination by the Commissioner under
section 30L is a non-reviewable decision, meaning that a taxpayer cannot object
or appeal a decision under this section.
As the Act already includes
specific FIDs exemptions, it is likely that this discretion will only be
applied in exceptional circumstances under which the imposition of FIDs would
be inconsistent with the intention of the FIDs provisions.