By Steven Lee and Rika Louw - 15 Jun 2020
If the executor of your Will or administrator of your estate is
an overseas person, they must apply to the Overseas Investment
Office for an exemption for any residential property to be
transmitted to them. Changes made in October 2018 to the Overseas
Investment Act 2005 (OIA) mean that an estate with an overseas
executor/administrator is likely to be affected by the regime.
An overseas person is unable to take an interest in residential
land without the consent of the Overseas Investment Office (OIO),
unless they fall under an exemption.
There are two classes of transactions to consider:
- first, the transmission of an interest in sensitive land (or
shares in a company that owns sensitive land) to the trustee,
executor, or administrator of the estate ("Administrator");
and
- second, the transfer of those assets to the beneficiary of the
estate.
While Regulation 40(1)(b) of the Overseas Investment Regulations
2005 exempts the second step, no such statutory or regulatory
exemption currently exists for the first step, being the
transmission to an Administrator who is an overseas person.
Equally, no clear consent pathway exists which will permit a
transmission to the Administrator.
Pursuant to the powers under section 61B of the OIA to manage
impractical, inefficient, or burdensome issues with the OIA, the
OIO has created a (special) exemption pathway for transmissions to
Administrators. As this is not a standard exemption, the
Administrator must complete an application to obtain such an
exemption. This process involves completing a short
application form and submitting it electronically to the OIO.
The OIO advises that an exemption should be
sought before Probate or Letters of
Administration are granted by the High Court.
Martelli Mckegg Lawyers specialise in overseas investment laws
and trust and estate matters. It is important for overseas
Administrators to seek legal advice from lawyers with overseas
investment expertise given that the OIO has the power to impose
penalties on those people who do not comply with the OIA.
Contacts
Steven
Lee
Rika Louw