Are foreign trusts the new black?

A Matter of Trusts

Taxation in Australia

It seems everyone is introducing regimes for foreign trusts. The Commonwealth has had a foreign trust regime for many years. But in recent times, the Victorian, New South Wales and Queensland governments have all brought in duty surcharges that apply to foreign persons, including the trustees of foreign trusts. Unhelpfully, each jurisdiction has a different test for what constitutes a foreign trust and each test catches what most people would consider to be a non-foreign trust.
This article has limited its consideration of foreign trusts to the new duty surcharges for each regime and the Foreign Investment Review Board (FIRB) regime. There are other situations where foreign trusts will attract special rules (for example, the new foreign resident capital gains withholding regime and the new FIRB taxation conditions).
It should be noted that this article contains a high-level review of each of the regimes. The relevant provisions for each measure are complicated and contain their own individual nuances which should be reviewed in detail to confirm whether that regime will apply to any particular situation. 

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