How does a “Going Concern” affect GST?

A sale of business where all that is necessary to operate the business is transferred to the purchaser is known as the supply of a ‘going concern’. In simple terms, the business has the ability to continue to function, as was the case immediately prior to sale. The revenue generated

The GST Margin Scheme – What is it?

The margin scheme is a way of working out the GST you must pay when selling a property that is a part of your business. Where the margin scheme does not apply (in most cases), you would calculate the GST as one-eleventh of the sale price. Where the margin scheme

How do Business Losses Affect GST?

The ATO identifies a profit motive as one of the key indicators of an intention to carry on an enterprise. For this reason, the ATO places heavy emphasis on the achievement of profits. A business that consistently operates at a loss and does not have a reasonable prospect of achieving

What happens with GST if you change the use of your development?

What happens if you are a GST-registered property developer who builds apartments exclusively for sale, and later decides to rent them? The typical situation is that you would start out by correctly claiming input tax credits on all acquisitions relating to the development, including architect’s fees, legal fees and construction

Do you need to register for GST?

If you are carrying on an enterprise you are entitled to register for GST. When your GST turnover exceeds the turnover threshold, you must register for GST. An ‘enterprise’ includes activities done as part of an ongoing business and one-off activities that share the characteristics of a business dealing (such

Property development and GST

There are many Goods and Services Tax (GST) implications for property development businesses and, without a good working knowledge of these implications, you may find yourself in a tricky situation. Under the GST Act, an entity is liable to pay GST on ‘taxable supplies’ that it makes, and it is

Structuring your property development within your SMSF

Assuming that all the regulatory requirements can be satisfied, it may be possible for your SMSF to be undertaking activities in a number of ways, including: As sole owner of the project, using SMSF funds By a limited recourse borrowing arrangement JV or as tenants in common By investing via

Property development in your SMSF – Yes or No?

From a tax perspective, your self-managed superannuation fund (SMSF) is a good place to make property development profits, provided you won’t need to access the money until retirement. The downside is that it also involves cutting a path through a jungle of complex tax and legal regulations, all at the

Development Agreements vs Joint Venture?

A development agreement is a contractual arrangement between the builder and land owner for which there is a fee for the development of the land. This arrangement differs from a typical JV where the result is a sharing of the final product (the completed houses, units or apartments), as the

Alternative Joint Venture (JV) structures

Are there alternative joint venture (JV) structures?  Indeed there are. What if you decided to use a company or unit trust as the JV vehicle? The key difference between the partnership JV and company or unit trust from a structuring point of view is the issue of losses. In a