Can the brains trust shed any light on this for me? We have a 25% share in a commercial IP owned with 2 other parties (25/25/50 split). Property has been owned since pre GST days, so none paid on purchase. Both 25% owners are GST registered - 50% owner is not. Considering implications of sale....currently has a long-standing tenant in place but no tenancy agreement (I know....don't get me started!) and may become vacant. If sold when vacant: 1) Does GST have to be applied to the whole sale, given 50% owner is not registered? 2) Are 25% GST registered owners liable to pay GST, given that there was none claimable on purchase? There will be CGT implications, so the extra 10% is a serious consideration. I'm thinking it may well be sensible to find an alternative tenant before sale, so it becomes a 'going concern'. What do others think?
How is the tenant invoiced for rent? With gst or without? Is it owned in partnership with % or in another vehicle?
No GST has been claimed on rent (hasn't changed since pre-GST days). The tenant is a related entity and just pays without invoice (yes, I know !??*!) Ownership is %
Is there an enterprise - Yes. Will the enterprise make a supply that exceeds $75K if the property is sold ? Yes. Therefore the enterprise may be required to remit 1/11th of the supply to the ATO as GST. The issue of no GST previously is of no concern. GST applies after 1 July 2000. Then the ENTERPRISE (ie the THREE owners in partnership) require a ABN before a sale and must contract in a manner that considers GST. The individual owners ABN etc is a red herring. The buyer may require a tax invoice and would make enquiries and may seek a GST clause that covers the contingent liability if GST was ignored / unpaid. If sold vacant then the going concern basis cannot be used to sell the property GST free. A strategy to sell with a tenant under a suitable short term lease should be considered.
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