EV 5010081133344currentnon-binding advice

GST and the margin scheme

Non-binding edited private advice. This is an edited version of private advice the ATO gave to a specific taxpayer about their own circumstances. You cannot rely on it — it is not binding and provides no protection for anyone else (see PS LA 2008/4). Use it as a guide to the ATO’s thinking, not as authority.

1

Are you entitled to apply the margin scheme to calculate the GST on the sale of your property xxxx (the property)? All further legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) unless stated otherwise.

2

Yes, you are entitled to apply the margin scheme under Division 75 of the GST Act to calculate the GST on the sale of your property. As your supply is not ineligible for the margin scheme under subsection 75-5(3) of the GST Act.

3

You are the owner of the property. You are carrying on an enterprise in the property and construction industry. You are currently registered for GST and have been since xx. You purchased the property from xx, a third party for $xx and the property settled on xx You purchased the property from xx, a third party for $xx as per contract of sale dated xx. xx were registered at the time they sold the property to you. The property was a residential premise and according to the contract the sale was not taxable, no GST was charged. You demolished the house on the land. You now intend to sell the vacant residential land to an unrelated third party. Your sale of the property is in the course of carrying on your enterprise and the sale is going to be a taxable supply. The property has not yet sold.

4

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 A New Tax System (Goods and Services Tax) Act 1999 Section 72-5 A New Tax System (Goods and Services Tax) Act 1999 Section 75-5