GSTD 2012/1 – residential premises
This GST Determination, released on Wed 22.2.2012, deals with the GST consequences following the sale of residential premises that are subject of a lease.
It states there is a continued supply of the premises by way of lease, which remains an input taxed supply. Consequently, the purchaser of residential premises is not entitled to an input tax credit in respect of the purchase of the premises if and to the extent that it is intended that the lease will continue after the sale. The purchaser may be required to make a Div 135 adjustment, if the premises were acquired through a supply which qualified as a supply of a going concern.
The Determination applies before and after its date of issue and was not previously issued as a draft.
GSTD 2012/2 – commercial premises
This GST Determination, also released on Wed 22.2.2012, deals with the GST consequences following the sale of commercial premises that are subject of a lease.
It states that the purchaser is liable for GST relating to the lease, with the liability determined in accordance with Divs 29 and 156 of the GST Act. However, the purchaser is entitled to claim an input tax credit for the acquisition of the premises (providing the margin scheme has not been applied). The purchaser may also be eligible for input tax credits for acquisitions relating to the purchase or ongoing lease of the premises. The vendor is not liable for GST relating to the lease where it is no longer in receipt of or entitled to rent or other consideration for the lease following the sale of the reversion.
The Determination applies before and after its date of issue and was not previously issued as a draft.
Addenda to GST Rulings
The ATO on Wed 22.2.2012, issued Addenda to GST Rulings GSTR 2004/4 (Assignment of payment streams including under a typical securitisation arrangement) and GSTR 2006/9 (Supplies) to amend the Rulings following the publication of GSTD 2012/1 and GSTD 2012/2. The ATO also issued an Addendum to GSTR 2008/1 (When do you acquire anything or import goods solely or partly for a creditable purpose?) to amend the Ruling following the publication of GSTD 2012/2. The Addenda apply both before and after their date of issue.
[LTN 35, 22/2]