GST/Going concern on sale of property

How would this be a going concern, the most you have done is sold a property which has an approved da. http://www.ato.gov.au/Business/GST/When-to-charge-GST-(and-when-not-to)/GST-free-sales/Sale-of-a-business-as-a-going-concern/

Get legal advice or risk paying 10% to the government.

Ask you accountant to put his arguments in writing and back it up with legislation.

Hi Juvanix,

There seem to be logic errors in your original explanation. I am not sure if this is my confusion or your misunderstanding of the facts. See if you can follow my logic. This is the statement I have a problem with:

"-Purchase property in June 2009, under a unit trust structure, registered for GST, sale was through a 'mum and dad' party with 10%GST included. Unit Trust did not pay any GST to the ATO as it was purchased from a non-entity."

Firstly, "sale was through a 'mum and dad' party with 10%GST included" – This mum and dad entity must have been registered for GST to charge you GST. It is not lawful to charge GST unless you are registered. I find it difficult to believe your advisers would not have checked this at the time. Don't rely upon them, check for yourself http://www.abr.gov.au

Secondly, "Unit Trust did not pay any GST to the ATO as it was purchased from a non-entity." Your previous statement says that 10% GST was included. The very next statement says it wasn't. I hope you can see my confusion.

Lastly, if your Unit Trust did pay GST to the ATO at the sale then your Unit Trust may be entitled to a refund. This has nothing to do with the entity you purchased from, it is dependent only on your Unit Trust's GST status. If, however, your Unit Trust did not pay GST at the original sale then no refund could be claimed.

Now for the difficult question of whether or not your current accountant seems barmy or not. One of the telling factors in any professional person is being able to make clear difficult or complex situations for their clients. I suggest that you may have to have a longer chat with your accountant and ask as many questions as you can think of until you are satisfied that you have the answers you need. I am not suggesting these answers will all be in your favour but at least they should be clear to you.  To answer the question, YES, some residential premises are input taxed sales. I suggest you go back to him for explanations. He has all your relevant documentation and information. Ask him what are the circumstances around which residential properties are input taxed supplies and which are not, generally. Then have him apply that, to your satisfaction, to your Unit Trust property in question. Remember he is there to serve your interests, you are the client. Just to clarify a little if the property was used as a motel, for example, ie commercial residential accommodation it would be an input taxed sale. if not commercial then it is unlikely that GST is applicable. The relevant section is below;

Section 40-65 of the GST Act provides that sales of residential premises are not subject to GST, if the residential property is to be used "predominantly" for residential accommodation.

I hope this helps you

kind regards