The AAT has affirmed the Commissioner’s decision concerning the GST liability of 2 taxpayers associated with the sale of real property between 2008 and 2009.
The taxpayers had purchased property, which was eventually subdivided and on-sold. They contended, among other things, that they “never had an intention of not including GST in returns or defrauding the Commissioner and that they wanted their returns to be correct”. They also claimed they were “lay people” who relied on “legal people” to assist in the sale of the subdivided parcels of the property. The taxpayers claimed there was no profit in the property and, therefore, there was an assumption that no GST would be payable.
The AAT noted that the taxpayers’ submissions were just that – submissions – and were not supported by evidence and could not be accepted as facts before it. It said the relevant dispute concerned the applicability of the margin scheme pursuant to s 75-5 of the GST. The AAT held that documents provided to it concerning the agreements for the sale of the property did not reflect any agreement in writing between the vendor and purchaser to which the margin scheme was to apply as required by s 75-5. Therefore, it held the taxpayers’ case concerning primary tax must fail. It also affirmed the 12.5% penalty imposed as not being harsh in the circumstances.
(AAT Case [2012] AATA 884, Re Chen & Anor and FCT, AAT, Ref No: 2012/1585, O’Loughlin SM, 19 November 2012.)
[LTN 245, 18/12]