GST on Flipping properties

Former newsreader jailed over $1.7m bill

Any comments on this?

 

She wasn't flipping, it was subdivision hence a GST issue.

 

An enterprise. GST would have applied

"Semmens ignored advice she did not want to hear" I think this sort of thing happens a lot

 

What's to be said - can only blame herself for where she's en

Only has herself to blame

 

But I bed she is blaming others!

 

No doubt !

 

Flipping properties which are existing and now changing the structure significantly..then unlikley to attract GST so long as you are not conducting an commercial enterprise. If you do a lot of year then you are conducting a commercial enterprise.

The issue with women was she as developing ...and if you on sell for a profit you need to pay GST as she as doing it on a commercial basis. There are ways to minimize GST under the margin scheme. Don right you will pay 3-6%. GST

 

10 properties in 6 years. She only has herself to blame. Not only do substantial renovations attract GST but this was clearly an enterprise.
The ATO would have given her multiple times to pay the bill which would avoided her going to jail. I'm guessing she doesn't have any of the profits left to pay the bill and so figured the only option was to fight it to the death and didn't win.

 

Some further details about her flips, subdivisions and developing in The Age article https://www.theage.com.au/national/...sion-to-deer-park-prison-20191121-p53cp6.html

 

Thanks for all the comments.

 

Thats not correct.

The word is "enterprise"...Commercial does not come into it. Or frequency. Frequency merely makes it a business for income tax purposes but doesnt change any tax issues otherwise. A single event is sufficient. Tax Ruling MT 2006/1 uses a load of generic words to address what is a enterprise. A systematic process to buy, seek approval (or not!) and conduct significant / substantial reno's and sell will be enough.

Is it new premises or a sale of existing residential premises ? If so GST may not apply. But the substantial reno issue may impact. And yes, the margin scheme IF its available and claiming GST on inputs.

This case was also about income tax avoidance. Blatant avoidance and non-disclosure of profits under income tax and GST law. Add penalties at the highest levels. She sought advice and ignored it....She claimed the advisers fees as deductions so finding the advice she was given was easy.

 

As per @Paul@PFI comments, doesn't need to be multiple.
I have bought, renovated, sold within 12 months, it's a single event, but it's an enterprise.
GST will apply, margin scheme used, income tax payable.

 

https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20033/NAT/ATO/00001#fpF5

@Paul@PAS @Terry_w - a query for the experts please - if a cosmetic flip was being undertaken (ie not a substantial renovation per ATO guidelines - kitchen cabinets & bench, bathroom glass and fittings, paint & flooring but no walls nor extensions),
However if this was being done by a company registered for GST that also was in the process of developing, would that cause an issue and result in GST applying?

Confirming the property would not be new property and would be existing residential premises.

Working through the ATO appendix 1 at the bottom of the attached link (GSTR 2003/3) results in no GST but wondering if the ownership structure causes an issue (as per para 11 of GSTR 2003/3) and there is another reference that should be checked?

Appreciate your thoughts as always.

Thanks

 

Other celebrities have ripped off more tax and never got a jail sentence eg put a shrimp on the barbie, you call that a knife? this is a knife!

 

Ownership entity shouldn’t change things