GST and Property: Ongoing Issues, Conundrums and Practical Solutions – a recorded lunchtime online conference

Duration: Approximately 2.5 Hours

Hear from the experts at this online conference. You can watch it on your computer or on your portable electronic device from anywhere.

The conference will be based on our highly successful video webinar technology: there'll be a chairperson and presentations.

One registration can be shared by colleagues within the same firm utilising the same login.

THE PROGRAM

Session 1: GST Registration, the Meaning of Enterprise and the Mum and Dad Developer

If you’re not registered or required to be registered for GST, you don’t have to account for it and you don’t need to add GST to the purchase price. Property costs, so that makes a big difference to the profitability of a development. If you’re a small developer, you may not even need to be registered or, if registered, you may be able to cancel it. It depends on whether you are carrying on an enterprise. This presentation will review the meaning of enterprise in the context of small property developer and discuss both registration and the cancellation of registration as a strategy to minimise the impact of GST.

• The pluses and minuses of registration – claiming of input tax credits vs no GST, the use of the margin scheme vs no registration
• The principles:
  • when are you carrying on an enterprise?
  • what is entailed in carrying on a business – common law – ATO view and ruling
  • the meaning of business-like activity
  • practical examples
• Registration and the turnover test – mere realisations of a capital asset
• How this plays out in property development:
  • the redevelopment of the suburban block
  • rezoned farmland, broadacre development and the development agreement
  • other examples
• Timing – when should you register – when should you deregister?

Session 2: Traps in GST-free Supplies of a Going Concern – And How to Avoid Them

Selling a business as a GST-free going concern is now regarded as standard operating practice, which can give rise to complacency and mistakes. This session explores the types of issues that can be overlooked by advisers and taxpayers entering into supply of a going concern, including:

• Should you sell a business as a GST-free supply of a going concern?
• Can you sell a business as a GST-free supply of a going concern?
• Selling property as a going concern, including:
  • selling land and assigning leases;
  • assigning management and services contracts
• Transactions involving multiple parties (multiple vendors, single purchaser and vice versa)
• GST adjustments for going concern transactions
• GST drafting for contracts involving GST-free supplies of a going concern

Session 3: Stepping Through the Margin Scheme in Practice

The provisions of the margin scheme are familiar to tax advisers and taxpayers in the property space. However, the practical application of the rules can lead to unexpected results, especially with the need to trace through historical transactions. This session provides a case study intensive practical exploration of how the margin scheme operates and understanding the importance of tracing historical transactions, including:

• Valuation methodology for margin scheme purposes
• Dealing with pre-GST property sales
• Using the margin scheme where a going concern exemption was used in the historical chain of property transactions
• Evidence of historical agreements to apply the margin scheme: The Trustee for the Seabreeze Estate Unit Trust v Commissioner of Taxation [2019] AATA 1395
• Options for purchasing property and their impact on using the margin scheme:
  • Development agreement and purchase later
  • Leave house on residential property
  • Knock down house and sell vacant land