GST Margin Scheme Mortgagee Sale

Discussion in 'Accounting & Tax' started by Summersky, 16th Oct, 2015.

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  1. Summersky

    Summersky Member

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    This is a question directed to the fellow accountants here.

    Can the GST margin scheme be applied on a property being purchased under a mortgagee sale?

    I've heard that the answer is No, but I cannot find any info confirming this.

    Just wondering what you guys think?

    Cheers

    Andrew
     
    Summersky, 16th Oct, 2015
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Residential?
    New?
     
    Terry_w, 16th Oct, 2015
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  3. Summersky

    Summersky Member

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    I was actually only asking hypothetically. But for the sake of simplicity, let's say commercial.

    Does the mortgagee have the ability to pass the margin scheme on?
     
    Summersky, 18th Oct, 2015
    #3
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The mortgagee would step into the shoes of the owner of the property so if the owner could have applied the margin scheme then the mortgagee should be able to - I think.
     
    Terry_w, 18th Oct, 2015
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Terry_w, 18th Oct, 2015
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  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Very easy to answer. What does the contract of sale say ?? Its the ONLY determinant of the margin scheme.
     
    Paul@PAS, 19th Oct, 2015
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  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The mortgagee in possession is not the legal owner. A trustee relationship
     
    Paul@PAS, 19th Oct, 2015
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  8. Summersky

    Summersky Member

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    Ah ok so the fact that the mortgagee is involved doesn't necessarily mean the margin scheme cannot be applied.

    Thanks for clarifying this

    Cheers,

    Andrew
     
    Summersky, 19th Oct, 2015
    #8
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    You may expect that the bank / ATO may "garnishee" vendor proceeds where a mortgagee sale is involved but this is just a settlement issue. The REA trust account will also become involved and you could be asked to consent to release of funds. Check with lawyer if that occurs. Most important is that the lender is onboard with the sale so that delays don't occur.
     
    Paul@PAS, 19th Oct, 2015
    #9