A joint venture (JV) vs a partnership – Be careful

The benefits of an unincorporated JV include that there is no joint and several liability. In other words, each of the parties in the joint venture is responsible for their own tax consequences and one cannot impinge on the other. The real-life problems that arise if you have created an

What is a joint venture?

Property development arrangements have been on the ATO’s radar for a very long time and we are currently seeing audit activity looking at the GST treatment of joint venture (JV) arrangements. One of the problems with understanding JVs is that the term itself is used in a number of different

What is a special purpose vehicle (SPV)?

A special purpose vehicle (SPV) is a separate formal structure (either a company or a trust) that brings together separate parties, such as a developer and an investor, for the purpose of a property development. These property developments usually exist for a defined time period and are generally born from

Structuring your property development – what’s best for you?

If you are considering getting into property development, you could structure the development as a sole trader, partnership, company or trust. As with your main business, many developers will protect themselves by using a separate entity (a company or trust) for each development. However, the ownership of the land on

What happens when your property development changes?

The basic tax position for a property development is: A capital asset is something that you acquire with the intention of holding it and generating a return from Activities you undertake in respect to the property may amount to the carrying on of a business, or an isolated profit-making If

What is a profit-making transaction when it comes to property?

Unlike a mere realisation of an asset’s value, a profit-making transaction is one where an asset was purchased with the intent of selling it for profit. This transaction is considered revenue, rather than capital (even if it’s an isolated or one-off transaction), which means that the net profit from the

Is your property development considered an income-generating business?

When would you be considered to be operating a business of property development? What difference does it make? Your property development is considered to be a business where you have a history of property development. If you are considering investing in your first property development, that is most likely to

Understanding “Tax on mere realisation of a capital asset”

A capital asset is something that you acquire with the intention of holding it and generating a return from it and not for the purpose of profit-making by sale. For example, a residential or commercial property that you hold for a period and rent would be considered a capital asset,

Taxation issues for property developments

There are many tax and legal issues when dealing in the property development space. It can be a potential minefield. Fortunately, by understanding the lay of the land you will be in a much better position to protect yourself, or to ask your accountant or financial adviser the right questions

Your business structure – complex or simple?

A complex structure that involves various layers will have more compliance issues attached to it, than a simpler structure. For example, a structure consisting of a company and a unit trust with two discretionary trusts as unit holders may provide the ideal structure for a smaller business that will also