Hi all,
Im am selling my first IP since GST comenced, is GST payable.
Ive owned the IP for two years and will be making 62K GP. If payable can I use it as a tax deduction next year. All advise appreciated.This issues was covered on another site. Here is the answer from that site : The answer to the query is found in an analysis of what it is that you might be selling. GST is a transactional tax. That means that we examine a transaction to determine if the goods or services involved are taxable. The GST legislation exempts some items (e.g. medical services, basic foods), and categorises other items (e.g. residential property, residential rents) as “input taxed”. Input taxed means that you do not charge GST on the transaction, but neither can you claim back GST on inputs. There is an exemption to that general rule for NEW residential property. The question is whether what U do to the residential property in renovating it, changes it into a NEW residential property for the purposes of the GST legislation. There is a 2003 GST ruling of about 50 pages which discusses the question. Your accountant is taking the conservative approach and saying “Beware”. Also, the margin scheme may apply to reduce the amount of GST, if in fact GST is payable. I don’t know if that helps you, because I know it didn’t do me any good !
The topic ‘GST’ is closed to new replies.
