GST and Property: Practical Compliance Imperatives - recorded online conference

You can put your staff in the boardroom and watch it there. You can watch it on your computer or on your portable electronic device. All for the same low price.

The conference will be based on our highly successful video webinar technology: there’ll be a chairperson, a panel of experts, presentations and discussion.

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: GST and the Margin Scheme: Complexities and Challenges in Practice

Applying the margin scheme on the sale of taxable property requires meeting a number of conditions. Working out eligibility to use the margin scheme and being aware of practical issues in its application is the subject of this session, including:

• When can you use the margin scheme?

• The importance of agreeing on application of the margin scheme in the contract

• The mechanics of the margin scheme – methods to work out the margin

• Interaction of the margin scheme with other provisions in the GST Act:

  • the margin scheme and Div. 184 – entities such as partnerships

  • the margin scheme and Div. 38 – GST free supplies

• Option fees – are they part of consideration when applying the margin scheme?

• Case report - The Trustee for the Whitby Trust [2017] ATC 10-450

Session 3: GST Clauses in Propery Contracts - Getting it Right

There have been many GST cases but by far the largest group are disputes over GST clauses. Getting them right is always harder than it seems: so often the parties either ignore the clause or they don’t even think about GST, and then trouble ensues. This presentation will examine the key issues in the light of the wealth of decided cases:

• Why you need a GST clause: what happens if you don’t have one

• GST clauses in principle – what you need to cover – the straight forward case:

  • does the “price” include GST?

  • are the parties registered or required to be registered?

  • what is the status of the property

• GST clauses in standard form property contracts – tick the box contracts – problems in practice:

  • GST without the plus sign

  • GST inclusive clause – GST exclusive party behaviour

• Mistake and misrepresentation and their effect on GST clauses

• GST on settlement adjustments

• Going concern clauses

• Conditional GST clauses – the South Steyne clause

• GST clauses and disputes as to whether GST is payable:

  • purchaser demanding a tax invoice – surprised vendor

• GST incorrectly included in the purchase price:

  • windfall gain to the vendor

  • can there be a refund for incorrectly paid GST?

  • can you demand a refund from the vendor?