Tax Laws Amendment (2005 Measures No. 2) Act 2005 (78 of 2005)

Schedule 6   Goods and services tax and real property

A New Tax System (Goods and Services Tax) Act 1999

16   After section 75-10

Insert:

75-11 Margins for supplies of real property in particular circumstances

Margin for supply of real property acquired from fellow member of GST group

(1) If:

(a) you acquired the interest, unit or lease in question at a time when both you and the entity from whom you acquired it were *members of the same *GST group; and

(b) on or after 1 July 2000, there has been a supply (an earlier supply ) of the interest, unit or lease that occurred at a time when the supplier was not a member of the GST group; and

(ba) the *recipient was at that time, or subsequently became, a member of the GST group;

the margin for the supply you make is the amount by which the *consideration for the supply exceeds:

(c) the consideration for the last such earlier supply, if the supplier and the recipient were not *associates at that time; or

(d) the *GST inclusive market value of the interest, unit or lease at that time, if the 2 entities were associates at that time.

(2) If:

(a) you acquired the interest, unit or lease in question at a time when both you and the entity from whom you acquired it were *members of the same *GST group; and

(b) subsection (1) does not apply;

the margin for the supply you make is the amount by which the *consideration for the supply exceeds an *approved valuation of the interest, unit or lease as at 1 July 2000.

Margin for supply of real property acquired from joint venture operator of a GST joint venture

(2A) If:

(a) you acquired the interest, unit or lease in question at a time when you were a *participant in a *GST joint venture and the entity from whom you acquired it was the *joint venture operator of the joint venture; and

(b) you acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into; and

(c) on or after 1 July 2000, there has been a supply (an earlier supply ) of the interest, unit or lease to the entity from whom you acquired it (whether or not that entity was the joint venture operator of the joint venture at the time of that acquisition);

the margin for the supply you make is the amount by which the *consideration for the supply exceeds:

(d) the consideration for the last such earlier supply, if the supplier and the *recipient were not *associates at the time of the earlier supply; or

(e) the *GST inclusive market value of interest, unit or lease at that time, if the 2 entities were associates at that time.

(2B) If:

(a) you acquired the interest, unit or lease in question at a time when you were a *participant in a *GST joint venture and the entity from whom you acquired it was the *joint venture operator of the joint venture; and

(b) you acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into; and

(c) subsection (2A) does not apply;

the margin for the supply you make is the amount by which the *consideration for the supply exceeds an *approved valuation of the interest, unit or lease as at 1 July 2000.

Margin for supply of real property acquired from deceased estate

(3) If:

(a) you acquired the interest, unit or lease in question by *inheriting it; and

(b) none of subsections (1) to (2B) applies; and

(c) the entity from whom you inherited the interest, unit or lease (the deceased ) acquired it before 1 July 2000;

the margin for the supply you make is the amount by which the *consideration for the supply exceeds:

(ca) if you know what was the consideration for the supply of the interest, unit or lease to the deceased and you choose to use that consideration to work out the margin for the supply - that consideration; or

(d) if paragraph (ca) does not apply and, immediately before the time at which you inherited the interest, unit or lease, the deceased was neither *registered nor *required to be registered - an *approved valuation of the interest, unit or lease as at the latest of:

(i) 1 July 2000; or

(ii) the day on which you inherited the interest, unit or lease; or

(iii) the first day on which you registered or were required to be registered; or

(e) if paragraph (ca) does not apply and, immediately before the time at which you inherited the interest, unit or lease, the deceased was registered or required to be registered - an approved valuation of the interest, unit or lease as at the later of:

(i) 1 July 2000; or

(ii) the first day on which the deceased registered or was required to be registered.

(4) If:

(a) you acquired the interest, unit or lease in question by *inheriting it; and

(b) none of subsections (1) to (2B) applies; and

(c) the entity from whom you inherited the interest, unit or lease (the deceased ) acquired it on or after 1 July 2000;

the margin for the supply you make is the amount by which the *consideration for the supply exceeds:

(d) if you know what was the consideration for the supply of the interest, unit or lease to the deceased and you choose to use that consideration to work out the margin for the supply - that consideration; or

(e) if paragraph (d) does not apply - an *approved valuation of the interest, unit or lease as at the day on which the deceased acquired it.

Margin for supply of real property acquired from associate

(7) If:

(a) you acquired the interest, unit or lease in question from an entity who was your *associate at the time of the acquisition; and

(b) none of the other subsections of this section apply;

the margin for the supply you make is the amount by which the *consideration for the supply exceeds:

(c) if your acquisition was made before 1 July 2000 - an *approved valuation of the interest, unit or lease as at 1 July 2000; or

(d) if your acquisition was made on or after 1 July 2000 - the *GST inclusive market value of the interest, unit or lease at the time of the acquisition.

(8) Subsection (7) applies to an acquisition through a supply made by:

(a) a *GST branch; or

(b) a*non-profit sub-entity; or

(c) a *government entity of a kind referred to in section 72-95 or 72-100;

as if Subdivision 72-D affected the operation of subsection (7) in the same way that it affects the operation of Division 72.

75-12 Working out margins to take into account failure to pay full consideration

In working out the *margin for a *taxable supply of *real property you make (the later supply ), if:

(a) you had acquired the interest, unit or lease in question through a supply (the earlier supply ); and

(b) the *consideration for:

(i) if your acquisition was not an acquisition from a *member of a *GST group of which you were also a member at the time of the acquisition - the earlier supply; or

(ii) if your acquisition was such an acquisition - the last supply of the interest, unit or lease at a time when the supplier of that last supply was not, but the *recipient of that last supply was, a member of the GST group;

had not been paid in full at the time of the later supply;

treat the amount of the consideration as having been reduced by the amount of unpaid consideration referred to in paragraph (b).

Note: If you subsequently pay more of the consideration for the earlier supply, you may have a decreasing adjustment: see section 75-27.

75-13 Working out margins to take into account supplies to associates

In working out the *margin for a *taxable supply of *real property you make to an entity who is your *associate at the time of the supply, treat the *consideration for the supply as if it were the same as the *GST inclusive market value of the interest, unit or lease at the time of the supply.

75-14 Consideration for acquisition of real property not to include cost of improvements etc.

(1) To avoid doubt, in working out the *consideration for an acquisition for the purposes of applying the *margin scheme to a *taxable supply of *real property, disregard:

(a) the cost or value of any other acquisitions that have been made by you, or any work that has been performed, in relation to the real property; and

(b) the cost or value of any other acquisitions that are intended to be made by you, or any work that is intended to be performed, in relation to the real property after its acquisition;

including acquisitions or work connected with bringing into existence the interest, unit or lease supplied.

(2) This section does not affect what constitutes *consideration for a purpose not connected with applying the *margin scheme.