S Hill Invest Co Pty Ltd ATF Hill Family Trust v Chief Commissioner of State Revenue [2026] NSWCATAD 41;

1. A Tribunal Book ("TB") contained the application to the Tribunal and the evidence and submissions filed by the parties. Those materials included a statement of Mr Hill, who was not required for cross-examination.
2. The Tribunal also received a joint bundle of authorities ("JB").

1. For the 2017 and subsequent land tax years, the LTA imposes SLT in respect of residential land owned by a foreign person: LTA, s 5A(1). SLT is payable in addition to (ordinary) land tax: LTA, s 5A(3).
2. The LTA employs the definition of "foreign person" in Chapter 2A of the Duties Act 1997 (NSW) which says (in s 104J(1)) that a "foreign person" means "a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth, as modified by this section".
3. Section 5D provides:

5D Surcharge land tax - discretionary trusts

(1) The trustee of a discretionary trust is taken to be a foreign person in that capacity for the purposes of section 5A if the trust does not prevent a foreign person from being a beneficiary of the trust.

(2) If a discretionary trust prevents a foreign person from being a beneficiary of the trust, the trustee is not in that capacity a foreign person for the purposes of section 5A.

(3) A discretionary trust is considered to prevent a foreign person from being a beneficiary of the trust if (and only if) both of the following requirements are satisfied -

(a) no potential beneficiary of the trust is a foreign person (the no foreign beneficiary requirement),

(b) the terms of the trust are not capable of amendment in a manner that would result in there being a potential beneficiary of the trust who is a foreign person (the no amendment requirement).

**Note - **

Under the transitional arrangements for this section in Schedule 2 to the Principal Act, the no amendment requirement does not apply to a trust that satisfies the no foreign beneficiary requirement immediately before the commencement of this section.

(4) A person is a potential beneficiary of a discretionary trust if the exercise or failure to exercise a discretion under the terms of the trust can result in any property of the trust being distributed to or applied for the benefit of the person.

**Note - **

A potential beneficiary is not limited to persons named in the trust instrument and extends to the members of any class of persons to whom or for whose benefit trust property can be distributed or applied pursuant to the discretions of the trust.

(5) For the removal of doubt, a person is not a potential beneficiary of a discretionary trust if the terms of the trust prevent any property of the trust from being distributed to or applied for the benefit of the person.

(6) In this section, property includes money, and a reference to the distribution or application of property includes a reference to the payment of money.

1. This section was introduced in 2020 by the State Revenue Legislation Further Amendment Act 2020 (NSW) ("Amendment Act"). It had a commencement date of 24 June 2020. A history of issues with s 5A in its application which led to the introduction of s 5D is set out by Hmelnitsky J in Hixson Pty Limited v Chief Commissioner of State Revenue [2025] NSWSC 192 ("Hixson"). That history was also considered by the Tribunal in Axiom88 Pty Ltd ATF Axiom88 Trust v Chief Commissioner of State Revenue [2023] NSWCATAD 252 ("Axiom") and Picone v Chief Commissioner of State Revenue [2022] NSWCATAD 382. (That history remains of relevance even though the facts of those cases differ from the current case.)
2. The Note to s 5D(3) refers to transitional arrangements:

**Note - **

Under the transitional arrangements for this section in Schedule 2 to the Principal Act, the no amendment requirement does not apply to a trust that satisfies the no foreign beneficiary requirement immediately before the commencement of this section.

1. These transitional provisions relate to discretionary trusts and were introduced in cl 66 of Sch 2 of the Land Tax Management Act 1956 (NSW) ("LTMA") at the same time as s 5D of the LTA. As stated by Hmelnitsky J in Hixson:

42. Schedule 3 of the Amendment Act amended the LTMA by inserting clause 66 into Schedule 2. Clause 66 provides as follows:

66 Amendments relating to discretionary trusts

(1) Section 5D of the Land Tax Act 1956 applies to the assessment of land tax liability in respect of the 2017 land tax year and subsequent land tax years.

(2) If the trustee of a discretionary trust is liable in that capacity as a foreign person for surcharge land tax in respect of the 2017, 2018, 2019 or 2020 land tax year -

(a) the trustee is exempt from that land tax if the terms of the trust have been amended, before payment of the land tax is due and before midnight on 31 December 2020, so that the trust prevents a foreign person from being a beneficiary, or

(b) if that land tax has been paid, the trustee is entitled to a refund of that land tax if the terms of the trust have been amended, before midnight on 31 December 2020, so that the trust prevents a foreign person from being a beneficiary.

(3) A trust that satisfies the no foreign beneficiary requirement under section 5D of the Land Tax Act 1956 immediately before the commencement of that section is considered for the purposes of that section to prevent a foreign person from being a beneficiary of the trust (without having to satisfy the no amendment requirement under that section).

[(4) not duplicated in these reasons]

(5) The Chief Commissioner may in a particular case extend the date by which payment of surcharge land tax by a trustee is due so that the trustee qualifies for exemption from that surcharge land tax under this clause if the terms of the trust have been amended before midnight on 31 December 2020 (but after the date by which payment would otherwise be due) so that the trust prevents a foreign person from being a beneficiary.

...

(7) Expressions in this clause have the same meanings as in section 5D of the Land Tax Act 1956.

The effect of the 2020 amendments

43. ... it is possible to make some general observations about how the 2020 amendments operate.

44. So far as discretionary trusts generally are concerned, the provisions provide a series of grace periods and concessions. Clause 66(2) allowed a grace period for trustees of discretionary trusts by providing that they would either be exempt or entitled to a refund if, before midnight on 31 December 2020, the terms of the trust were amended to prevent a foreign person from being a beneficiary. In that way, despite the retrospective operation of s 5D, trustees of discretionary trusts would not be liable for earlier periods provided they acted within the grace period.

45. Those trusts that had been amended prior to the commencement of s 5D so as to satisfy the 'no foreign beneficiary requirement' but not the 'no amendment requirement', no doubt in circumstances where there was uncertainty as to precisely what was required to avoid the operation of s 5A as originally enacted, were granted a concession. In those cases, the trust was taken to prevent a foreign person from being a beneficiary for the purposes of s 5D.

1. The Trust was established by trust deed dated 17 September 2009 ("Original Deed"): TB 74, 94.

(1) It was established in Victoria and governed by Victorian law.

(2) The initial trustee and appointor was S Hill Invest Co Pty Limited.

(3) It is a discretionary trust.

(4) Clause 1 was the definitions clause.

(a) "Beneficiaries" was defined in cl 1.4 as meaning "the Primary Beneficiaries and General Beneficiaries and includes any person or entity that may at any time come within the definition of a Primary Beneficiary or General Beneficiary, notwithstanding that the person or entity may not be in existence or may not have been within the definition of a class of Beneficiaries at the Date of this Deed".

(b) "Primary Beneficiary" was defined in cl 1.23 as meaning "the persons named or described as such in item 6 of the Schedule"; that item referring to "Simon John Hill of [address] and his children and remoter issue".

(c) "General Beneficiary" was widely and extensively defined in cl 1.18 to include "any and all of the following in both their personal capacity and in their capacity as trustee of any other trust (unless otherwise stated) at any time and from time to time" - including the Primary Beneficiary, spouses and other relatives, as well as:

"(d) an Eligible Company;

..

(h) an Eligible Charitable Institution;

...

(m) any person, firm, corporation, trustee, organisation, club, association or other body wherever resident or incorporated and whether listed on a stock exchange or not which the Trustee may nominate with the consent of the Appointor;... "

(5) The Variation Power was in cl 16. Clause 16.1 permitted amendments by the Trustee with the consent of the Appointer. It was subject to restrictions in cl 16.2 which are not relevant to my consideration here.

1. Both parties accept that the Original Deed contained neither of the requirements in s 5D(3)(a) or (b) of the LTA.
2. It is not in dispute that the Applicant purchased residential properties in NSW at Hastings Parade, North Bondi (in 2016 and 2022) and at Bondi Rd, Bondi (in 2021).

1. In February 2021 (before settlement of the Bondi Rd property) a lawyer was instructed to prepare an amendment to the Original Deed. The Tribunal was told that the lawyer was instructed to prepare amendments to meet the requirements in s 5D of the LTA so no surcharge land tax would be assessed on residential property owned by the Trust. In his statement, Mr Hill said (TB 617):

"From the outset, I have engaged professional and legal and tax advisers to ensure the trust complied with land tax obligations. This included guidance on property registration, tax filings, and ongoing compliance.

In 2021, on the advice of my tax advisers, I instructed a solicitor to amend the trust deed to ensure compliance with legislative provisions preventing distributions to foreign persons. At that time, it was my understanding, based on this advice, that the deed amendments achieved compliance."

1. There is contemporaneous evidence of instructions received in the form of a letter written by Behan Legal to the Trust's accountant on 26 February 2021 (TB 619) which said:

"Deed of variation for Hill Family Trust

Thank you for your instructions asking us to review your client's trust and to prepare the deed of variation.

We have created a definition for the term "Foreign person" and then excluded that class of persons from your client's trust, which will overcome the current duty payable by foreign persons and not deem your trust as being liable for that duty.

Please arrange for your client to immediately execute the variation and ensure that you keep all the deeds together to avoid and issue with lost or destroyed trust deeds in the future."

1. It appears from this correspondence and the documents before the Tribunal that both the law firm, and the accountant, were based in Melbourne, Victoria.
2. The "Hill Family Trust Deed of Variation" ("First Variation") was executed by the Applicant on, and dated, 26 February 2021. The Operative Provisions of the First Variation (TB 110) are set out below:

"1. Pursuant to the provisions of Clause 16 in the Trust Deed, the Trustee amends clause 1 by adding new clause 1.32 to provide an additional definition, as follows:

Foreign Person Anyone who is defined by the following legislation (as amended), as:

* The following paragraph contains unmatched round brackets.

a) a "foreign purchaser" under section 3 Duties Act 2000 (Vic);

* The following paragraph contains unmatched round brackets.

b) an "absentee owner" under section 3 Land Tax Act 2005 (Vic);

* The following paragraph contains unmatched round brackets.

c) a "foreign person" under section 104J Duties Act 2001 (NSW);

* The following paragraph contains unmatched round brackets.

d) a "foreign person" under section 234 Duties Act 2001 (Qld);

* The following paragraph contains unmatched round brackets.

e) an "absentee" under section 31 Land Tax Act 2010 (Qld),

* The following paragraph contains unmatched round brackets.

f) a "Foreign Person" under s14 Stamp Duties Act 1928 (SA).

2. Pursuant to the provisions of Clause 16 in the Trust Deed, the Trustee varies the Trust by adding a new clause 24 to the Trust Deed, as follows:

"24 Exclusion of Specified Persons

This deed specifically excludes any person who as a member of any class of Beneficiary under the terms of this deed and who either before or after the making of this deed is not an Australian resident or is a Foreign Person."

3. By signing this deed, the Appointor accepts and consents to the variations of the Trust.

4. The Trustee alters the Trust Deed to incorporate the changes contained in clause 1 and 2 of this deed."

1. On 5 November 2024, the Respondent notified the trustee of a review.
2. It is not in dispute that the Applicant's representatives fully co-operated with the Respondent during the review.
3. The Respondent determined that SLT should have been paid. Assessments issued on 27 November 2024 for the tax years 2020 to 2024 of which $440,207.25 was SLT. This comprised $37,197.30 (2020), $36,385.30 (2021), $45,400.65 (2022), $149,223.10 (2023) and $172,000.90 (2024) ("Assessments").

1. Further amendments were made by a "Deed of Variation and Exclusion" ("Second Variation") which was dated and took effect from 20 December 2024.
2. The background to the Second Variation was explained by Mr Hill in his statement as follows:

"When Revenue NSW later raised concerns that the amendment had not addressed every aspect of the anti-avoidance provisions, I immediately engaged a new solicitor to re-amend the deed and ensure compliance. At no stage has the trust made, nor has intended to make, any distributions to foreign persons.

I have always acted in good faith, kept thorough records, and promptly provided Revenue NSW with any requested information. My actions demonstrate a genuine commitment to complying with land tax requirements and to rectifying issues as soon as they became known.

...

In late 2024, during the process of selling a property on Bondi Road, Revenue NSW reviewed the deed and identified shortcomings in the 2021 amendment. This was unexpected, as I had acted on professional advice and believed the trust was compliant. Upon becoming aware of the issue, I acted immediately to resolve it.

Despite these efforts, Revenue NSW commenced an investigation and subsequently issued surcharge land tax assessments against the trust. This was deeply disappointing given the trust's genuine compliance intentions and the absence of any foreign beneficiaries."

1. Recitals C, E and F of the Second Variation stated:

"C. Pursuant to a Deed of Variation dated 26 February 2021, the Trustee exercised its variation power to vary the terms of the Trust Deed. The purpose of the variation was to exclude any 'foreign person' from benefiting under the Trust Deed, with the intention of avoiding the imposition of additional duty or land tax on foreign purchasers and foreign owners concerning property situated in Victoria, New South Wales, Queensland and South Australia.

...

E. The parties agree, confirm and acknowledge that:

i. the Deed of Variation dated 26 February 2021 was executed on the common understanding that the variations and exclusions expressed under the Deed of Variation were permanent and irrevocable;

ii. the parties intended that (and have operated on the basis that) the variations and exclusions effected under the Deed of Variation dated 26 February 2021 were permanent and irrevocable;

iii. at all relevant times, the Trustee and the Appointor consider that the variations and exclusions effected under the Deed of Variation dated 26 February 2021 were permanent and irrevocable; and

iv. Since the date that the Trust was created, the Trust has not made any distributions to any person who is a foreign person.

F. Notwithstanding Recital E, for the avoidance of any doubt, the parties wish to enter into this deed to document the Trustee's exercise of:

i. the Exclusion Power to exclude foreign persons from benefiting under the Trust; and

ii. the Variation Power to vary the Trust Deed in the manner set out in this Deed."

1. The operative provisions of the Second Variation, inter alia:

(1) deleted clause 1.32 as had been inserted by the First Variation;

(2) inserted new definitions of "Foreign Person", "Foreign Surcharge Duty" and "Land Tax Surcharge";

(3) Inserted a new clause 16.2(d) so as to expand the restriction on the powers of variation such that no alteration, variation, revocation or addition to the Trust Deed under clause 16.1 may "allow or result in a Foreign Person to become a beneficiary of the Trust or become entitled to benefit under the Trust"; and

(4) inserted new clause 9A "Exclusion of Foreign Persons".

1. The Applicant objected on 24 January 2025 against the Assessments for the relevant years here in dispute. The Objection attached the Second Variation.
2. The Respondent accepts that the Second Variation effected further amendments to the Trust Deed such that both requirements in s 5D of the LTA were satisfied "on and from 20 December 2024" (RS at [26], TB 721). An assessment for the 2025 tax year was reversed on objection such that no SLT was payable by the Applicant in respect of that year (TB 670). There is therefore no issue arising in these proceedings regarding that year.

1. As noted above, the Applicant's representative conceded at the hearing that the Applicant no longer disputed the assessments to SLT for the 2020 and 2021 land tax years. Accordingly, those assessments (in the amounts set out at par 29 of these reasons) are affirmed.

1. In respect of the remaining years, and in summary, the Applicant submitted as follows:

(1) The rules of statutory construction required that the relevant extrinsic materials relating to the amendments made to s 5D in 2020 must be taken into account, which clearly stated that SLT should not be imposed on a trust where (as in this case) there is no intention to make distributions of income or assets to a foreign person, citing CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 at 408.

(2) Since the introduction of the SLT regime, the Applicant has never had a foreign person as a beneficiary, has not made any distributions to a foreign person, and, under the terms of its deed, cannot be amended to allow a foreign person to become a beneficiary. The trustee has taken all reasonable and necessary steps to comply with the legislation, has consistently relied on qualified legal and accounting advice, and has never intended, nor is it legally able, to distribute to a foreign person.

(3) The Respondent has applied the foreign surcharge anti-avoidance law inappropriately.

(4) An alternative interpretation of the relevant provisions is available and should be adopted; being an interpretation which aligns with the overall purpose of the land tax regime, the specific intent of the provisions concerning foreign surcharges, and will be less burdensome to the taxpayer, an approach that should be preferred because "it avoids the unreasonable and unintended outcome" imposed by the Respondent.

1. The Applicant submitted that its intention was to ensure that the Trust Deed permanently excluded foreign persons from being beneficiaries. In its Reply Submissions at [2]-[4] (TB 725), it stated (my emphasis):

"In February 2021, the trustee engaged a qualified lawyer with clear instructions to comply with subsection 5D of the Land Tax Act (the foreign surcharge provisions). The sole purpose of this amendment was to ensure the trust would not be subject to NSW surcharge land tax.

The lawyer amended the trust deed to ensure that the trust could not distribute to foreign persons and complied in substance with the requirements of the law. From that time, the trust was completely prohibited from making distributions to foreign persons, did not in fact make a distribution to a foreign person, and had no desire or intention of making distributions to foreign persons.

Following a further amendment to the trust deed in December 2024, it is also permanently prevented from amending the 'no distribution clause'."

1. The Applicant says there are "hundreds or thousands" of discretionary trusts who have never complied with s 5D(3)(b) because of clause 66(2) of Sch 2 to the LTA and the Applicant should be treated the same because:

(1) It is clear from the Second Reading Speech that the purpose of s 5D was to only catch taxpayers who intended to make distributions to foreign persons;

(2) There was no such intention here - as is clear from the following facts:

(a) There were no distributions ever made to a foreign person;

(b) The First Variation remained in place from 21 February 2021 until the Second Variation was effected. As a result: no distributions were made to foreign persons; there was no intention to do so; the trust deed as it stood at 31 December 2023 and 2024 met the requirements of s 5D(3)(a) and so prohibited distributions to foreign persons; and when reviewed by the Respondent, each year had "closed" and by the time the objection was determined, the "no amendment requirement" had been expressly included.

(c) It was intended at all times to comply with the law, there was no mischief and there was no difference between this and the other trusts who remain "less compliant" - coming within concessions in cl 66(2); and

(d) That there are concessions in cl 66(2) makes it clear that the words "if and only if" in s 5D(3) are not absolute, and they should not be read so narrowly as to require compliance with s 5D(3)(b) when the matter has been "cured".

(3) The Respondent relied on the omission of the word 'irrevocable' from the Trust Deed (a word not appearing in the legislation) as the basis for determining there was no compliance with the 'no amendment requirement', which was an overly narrow construction which led to an absurd outcome which is illogical and unjust.

(1) While it may be accepted that the Applicant intended to comply with the taxation law, subjective intention has no part to play - the sole issue is whether the language of the Trust Deed fits within the requirements of s 5D(3) of the LTA;

(2) The text of s 5D(3) is unambiguous;

(3) The word "irrevocable" is merely a shorthand for the requirement in s 5(3)(b), and that requirement was not satisfied until 20 December 2024;

(4) The Applicant's reliance on advice and co-operation during the Respondent's review are relevant to penalty and interest, neither of which has been charged by the Respondent (RS at [38]), and do not go to the primary tax liability; and

(5) Notions of unfairness are not relevant to the Tribunal's task which is to administer the law (which here contains no relevant discretion) according to its terms so as not to disadvantage those taxpayers who have complied with their obligations under the same laws: Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 123 ([19]); Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [40]- [42] and Valencia v Chief Commissioner of State Revenue [2017] NSWCATAD 261 at [84].

1. The JB included the text of the Second Reading Speeches to the State Revenue Legislation Further Amendment Act Bill 2019 (NSW) ("2019 Bill") and the subsequent State Revenue Legislation Further Amendment Bill 2020 (NSW) ("2020 Bill").
2. The Second Reading Speech to the 2019 Bill (JB at 246) stated (my emphasis):

"This bill has three key purposes: Firstly, to avoid discretionary trusts being subject to surcharge purchaser duty or surcharge land tax where there is no intention that income or assets in the trust be distributed to foreign persons;...

With discretionary trusts there is a risk that trustees can unknowingly become liable for the surcharges. This is because discretionary trusts often give the trustee powers to distribute income and/or capital to a wide range of beneficiaries... If any one of the potential beneficiaries is a foreign person, or if the terms of the trust deed would allow for income to be distributed to a foreign person at any time, the trustee may be deemed to be a foreign person and therefore be liable for surcharge purchaser duty and/or surcharge land tax, even though none of the beneficiaries who actually receive or are likely to receive income is a foreign person.

To address this, schedule 1 to the bill - new section 104JA and its associated transitional clause - provides for surcharge purchaser duty exemptions and refunds when the terms of a discretionary trust are amended before the end of 2019 to prevent a foreign person from being a beneficiary. The transitional provision has retrospective effect ...

..since March 2017, Revenue NSW, through revenue rulings, client education activities and engagement with the Law Society of New South Wales and other stakeholder groups, has been advising taxpayers of the potential liability for surcharge purchaser duty that can arise under discretionary trusts and the possible need to make amendments to trust deeds.

Many trust deeds have now been amended and no surcharge duty incurred as a result. With this in mind, the Government considers that the end of 2019 allows sufficient time for any remaining trustees and their advisers to make necessary changes to trust deeds. As I mentioned previously, relief from surcharge liability will be contingent on the trust deed being amended to prevent a foreign person from being a beneficiary of the trust. This requirement has two elements: First, that no potential beneficiary of the trust is a foreign person - the no foreign beneficiary requirement; and, second, that the terms of the trust are not capable of being amended so as to allow for a foreign person to be a potential beneficiary under the trust - the no amendment requirement.

...

The second element is an important anti-avoidance measure to ensure that a deed cannot simply be amended to avoid surcharge and then be re-amended for the purposes of distributing income or assets to foreign persons. The terms of the trust deed preventing a foreign person from being a beneficiary under the trust must be irrevocable. When this legislation commences, some trust deeds will meet the no foreign beneficiary requirement already and the transitional provision specifies that such deeds will not need to be amended to meet the no amendment requirement. However, from commencement, an existing trust that does have potential foreign beneficiaries, or a new trust, will need to meet both requirements to ensure that a trustee is not deemed to be foreign person."

1. As relevant to this case, the 2020 Bill echoed the above comments and the reference to the "end of 2019" was subsequently extended to the end of 2020 (JB 249-250).

1. There was no relevant dispute, and I find, that:

(1) the Trust owned properties which comprised "residential land" for the purpose of s 5A of the LTA;

(2) the First Variation was executed on and took effect from 26 February 2021;

(3) the Original Deed as varied by the First Variation satisfied the "no foreign beneficiary requirement" in s 5D(3)(a) of the LTA;

(4) the Second Variation was executed on and took effect from 20 December 2024; and

(5) the Original Deed as varied by the First Amendment and the Second Amendment satisfied both of the requirements in s 5D(3)(a) and 5D(3)(b) of the LTA.

1. The only relevant question therefore is whether the trustee (i.e. S Hill Invest Co Pty Ltd in its capacity as the trustee of the Hill Family Trust) was a "foreign person" for the purpose of s 5A of the LTA, and thereby liable to SLT as assessed in respect of each of the years remaining in dispute. That, in turn, depends upon the application of s 5D.
2. As with land tax, SLT is an annual tax. It must therefore be assessed having regard to the position as at midnight on 31 December of the year preceding the land tax year. And I find that at each of the relevant taxing points remaining in dispute, being midnight on 31 December 2021, 2022 and 2023, the "no amendment requirement" in s 5D(3)(b) of the LTA was not met. As a result, for the purposes of s 5D(1) of the LTA, the trust did not at those times prevent a foreign person from being a beneficiary of the trust.
3. The provisions may appear complex, but there is a clear path dictated by the words actually used.
4. First, s 5D(1) is a deeming provision:

(1) The trustee of a discretionary trust is taken to be a foreign person in that capacity for the purposes of section 5A if the trust does not prevent a foreign person from being a beneficiary of the trust.

1. It created, as a starting point, a statutory fiction that the trustee of a discretionary trust is taken to be a foreign person for the purposes of s 5A if it did not meet the two requirements - which were set out in s 5D: see Interpretation, P Herzfeld and T Prince, Interpretation (3rd ed, 2024, Law Book Co) at [3.130].
2. Secondly, despite being professionally prepared, the First Variation did not vary the terms of the trust in a way that satisfied the "no amendment requirement" in s 5D(3)(b) as at midnight on 31 December preceding each relevant year in dispute because the terms of the trust were capable of amendment in respect of the clause which excluded distributions to foreign persons as defined. This position was not remedied until 20 December 2024, the date of execution of the Second Variation. Nor did the Recitals to the Second Variation operate to cure the earlier defect from a prior date. The First Variation was, as acknowledged by Mr Hill in his statement, incorrect.
3. Accordingly, s 5D(1) continued to deem the trust to be a foreign person for the purpose of s 5A unless another provision specifically applied to remove the requirement to comply with s 5D(3)(b).
4. Thirdly, there are very specific concessions in cl 66 of Sch 2 of the LTMA, but none of them apply to the Applicant. More particularly, the Applicant does not fall within either cl 66(2) or (3) of Sch 2 of the LTMA because:

(1) The First Variation was not made until 21 February 2021, after both the 24 June 2020 commencement date, and the extended date of 31 December 2020. Accordingly, the terms of the trust were not amended to satisfy either or those deadlines.

(2) As a result, the Trust was required to satisfy both requirements in s 5D(3)(a) and (b).

1. Fourthly, the words "if and only if" in s 5D(3) are not to be read down in this case or alternatively ignored as submitted by the Applicant:

(1) They are words of prescription, and therefore both limbs of s 5D(3) must be satisfied. Those words are, however, subject to the concessions in the transitional provisions noted above: as is clearly foreshadowed by the Note immediately below s 5D(3). See also Hixson at [44]-[45] extracted above.

(2) The legislation is therefore clear that other trusts would be placed in a different position under cl 66(2) or (3) of Sch 2 of the LTMA, but only if they did amend their deeds by the prescribed dates. As stated in the wording of that subclause, they were "considered for the purposes of that section to prevent a foreign person from being a beneficiary of the trust (without having to satisfy the no amendment requirement under that section)".

(3) It is incorrect to describe such trusts who were specifically excused from complying with s 5D(3)(b) as "less compliant" than the Applicant and contend that as a result, the Applicant should be treated likewise.

1. I disagree with the Applicant's submissions that invite the Tribunal to ignore the requirements of the statutory provisions having regard to the Second Reading Speech and the purported "purpose":

(1) Statutory interpretation is a task of interpreting, not rewriting, the relevant provisions. Section 33 of the Interpretation Act 1987 (NSW) requires NSW laws to be interpreted by preferring a "construction" that would promote the purpose or object underlying the Act to a "construction" that would not promote that purpose or object. In the case of extrinsic materials, such as second reading speeches, s 34 of that Act regulates the consideration which may be given to it. That section, in summary, permits such material to be considered to: (a) confirm that the meaning of the provision is the ordinary meaning conveyed by the text in context; and (b) determine the meaning of the provision if it is ambiguous or obscure or if the ordinary meaning in context leads to a result that is manifestly absurd.

(2) Although the provisions (and their interaction through various statutes) may be difficult to navigate, the text of the provisions relevant to this case is neither ambiguous nor obscure.

(3) The Second Reading Speech extracted above neither signals nor permits any departure from the legislative requirements. To the contrary. It differentiates the position for discretionary trusts which effected amendments to their trust deeds prior to specified dates. The distinction was foreshadowed, and time limits expressly stated in the law. The First Variation was not put into effect by the required date. The ordinary meaning of the provisions in this context is not manifestly absurd.

(4) It follows that I do not accept the Applicant's reply submission ([22], TB 728) that "[t]he retrospective nature of s 5D and the grace periods, amnesties and refunds which Parliament deliberately provided confirms that compliance efforts by taxpayers, even imperfect ones, were meant to be protected".

(1) Mr Hill appropriately sought professional advice and engaged qualified lawyers to prepare the First Variation;

(2) It was intended that the First Variation would (inter alia) meet the requirements so that the trustee was not deemed a "foreign person" and subject to surcharge land tax in New South Wales; and

(3) It was never intended for a "foreign person" to actually receive distributions from the Trust.

1. But, unfortunately for the Applicant, neither the subjective belief nor intention of the taxpayer (nor its relevant representatives) is relevant to this Tribunal's task.
2. The fact that no distribution was actually made, and the situation now remedied, does not assist the Applicant in respect of the years under review. The mischief to which the legislation is directed is a potential mischief as at the relevant enquiry date (midnight on 31 December preceding the taxing year) and not what actually happened, as was explained below by SM Frost in Waverley Investments Pty Ltd atf The Five Oaks Trust v Chief Commissioner of State Revenue [2023] NSWCATAD 255 at [49]- [55] (my emphasis):

49. There is no doubt that the requirements specified in s 5D must be met as at midnight on 31 December in each of the relevant years: so much, at least, is common ground between the parties.

50. It is also common ground that at each of those moments in time no potential beneficiary of the trust was a foreign person. This is because, at each of those moments in time, clause 1.14 of the trust deed excluded and disentitled foreign persons from being beneficiaries of the trust. So the requirement in s 5D(3)(a) is met.

51. It is also clear that the trustee was prohibited, because of the continuing ownership of residential land in New South Wales, from amending the trust deed at any one of those particular moments in time so as to make foreign persons potential beneficiaries.

52. But the requirement in s 5D(3)(b) is put more broadly than that. In my view, the question to ask at midnight on 31 December is whether the terms of the trust can ever be amended to include foreign persons as potential beneficiaries. In context, that is the natural meaning of the words 'the terms of the trust are not capable of amendment'. In this respect there is no relevant difference between the once-only taxing point under the Duties Act, and the annual taxing points under the land tax legislation.

53. There is nothing untoward in the Chief Commissioner's use of the word 'irrevocable': it is simply a convenient shorthand to describe the requirement in the statute.

54. In summary, I accept the Chief Commissioner's submission that the language of the 'no amendment requirement' is the language of capacity and future possibility. The provision looks to what is 'capable' of being done to 'result in' a particular outcome - and it is self-evident that the particular outcome, if it ever occurs, will occur at some point in the future, and necessarily after the relevant taxing point when the question (whether the terms of the trust are capable of amendment) is being addressed. That the particular outcome may occur after the land in NSW has been disposed of is irrelevant. In simple terms, s 5D(3)(a) looks to the position now, while s 5D(3)(b) looks to future possibilities."

1. As submitted by the Respondent, liability to SLT is created by direct operation of the LTA, and notions of fairness or "justice" do not apply when - as here - the statutory provisions contains no relevant discretion, even though hardship may result: Commissioner of Taxation v Ryan (2000) 201 CLR 109 per Gleeson CJ, Gummow and Hayne JJ at [18]-[19], [22], [29]. These principles have been consistently applied (as noted in the Respondent's submissions summarised above), regardless of the factual differences in those cases. I also note (and reject) the Applicant's submissions in reply at [33]-[35] which rely upon a dissenting judgment by Kirby J at [61] as if it were the findings of the High Court in Ryan.
2. The Respondent, and in review proceedings this Tribunal, is required to apply the law in accordance with its terms.

1. The correct and preferable decision is that SLT was payable by the Applicant for the 2020 to 2024 land tax years as assessed, and the assessments should be affirmed under s 63(3) of the ADR Act:

(1) the 2020 and 2021 assessments to SLT are no longer disputed; and

(2) in respect of the 2022, 2023 and 2024 assessments, the "no amendment requirement" in s 5D(3)(b) of the LTA was not satisfied as at midnight on 31 December 2021, 2022 and 2023 and, as a result, s 5D(2) did not apply and s 5D(1) operated to deem the Applicant (as trustee of a discretionary trust) to be a "foreign person" in that capacity for the purpose of s 5A of the LTA.

(1) The assessments to surcharge land tax for the tax years 2020 to 2024 are affirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.