GST & Property: The Challenges in Practice – a recorded half-day 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: Navigating the Margin Scheme in Practice

The margin scheme is central to the property development industry. This session reviews the key concepts in understanding how the margin scheme framework operates, including:

• The role of tax invoices
• Understanding the requirement for an agreement in writing
• Record keeping
  • Calculating the margin
  • Calculating the consideration for the acquisition of subdivided land or stratum title units
• Dealing with amalgamated land
• Effect of the margin scheme – no input tax credits available to purchaser
  • Limitations on resale
• Valuation issues – is the valuation provided on a GST inclusive basis?
• Getting GST advice early – what questions should the adviser ask?
• Examples from recent case law

Session 2: GST Supply of a Going Concern – A Case Study Intensive

The sale of a going concern gives rise to a GST exemption which can deliver major transfer duty savings to the purchaser, making it a particularly attractive proposition where real property is being sold. However, the simplicity of the legislative provisions can mask the complexities in practice. This session analyses Subdivision 38-J of the GST Act through the following case studies:

• Medical facility in shopping centre where the medical facility is going out of business but there are residential premises also attached to the strip of shops – can the going concern exemption apply?
• Sale of a motel business where the buyer wants to acquire the real property through one entity and the business assets in another entity – can the going concern exemption be used?
• Business is carried on through one vendor entity with the real property owned by a separate vendor entity –structuring to enable the use of the going concern exemption
• GSTR 2002/5 re: multiple vendors and multiple purchasers

Session 3: A New Dance Partner - GST Implications of Purchaser Substitution

With tightening rules on bank lending, the ongoing effects of COVID-19 and increased taxes on foreign buyers, developers are seeing an uptick in the number of transactions where the initial purchaser is looking to pull out of a sale contract or to substitute an unrelated third party. This session reviews the potential GST consequences of such transactions, including:

• If the initial purchaser outlays an amount to the vendor, how is it to be characterised and what is the GST treatment?
  • Forfeited deposits
  • Compensation payment
  • Incentive to accept step-in purchaser
• Incentives paid to step-in purchaser to acquire property and its GST treatment where:
  • Paid by initial purchaser
  • Paid by vendor
  • Reduced purchase price
  • Increased supply (e.g. extra car park) for same purchase price
  • Commissions received by real estate agent or another third-party facilitator