GST for the sold of commerical property

Q: A husband and wife bought a residential property (used for commercial purposes) as a going concern in 2011 for $720,000 with a café lease in place. After one month, the café lease expired and commenced a beauty therapy business as a partnership until June 2014, when they divorce. The registration of the partnership was cancelled and the business continued trading from the premises as a sole trader registered for GST. Now, the owners want to sell. A non-GST registered party provided an offer to purchase as residential. What are the GST implications? Is a balancing adjustment necessary and if so, from what date? Is it complicate due to the deregistration of partnership in 2014? 

GST of purchase an easement

Q: We have a client who has received a payment from Origin Energy for the option to purchase an easement on their property of $82,000(excluding GST). The client is not registered for GST as their income turnover is lower than $75,000 per annum. However, as the payment is over $75,000, should they be register for GST? And declare GST on the option to the ATO? The option is a one-off payment so they would not need to be registered for GST on an ongoing basis. Also, how does the option to acquire the easement and subsequent purchase of the easement need to be allocated for tax purposes? Will these transactions be considered CGT events and what will the relevant cost base be? for example, is the cost base for the option just any legal fees? Would the cost base for the purchase of the easement be a portion of the cost base of the land?

When the juices are GST-free

Q: ATO links note that bottled drinking water is GST-free, and if the fruit and vegetable juices’ content is greater than 90%, they are GST-free and GST taxable if is not. Peggy does not make fresh juices. She just buys bottled juices and then put them in the fridge and sell by bottle. The link above notes that taxable food includes all food and beverages sold in restaurants or for consumption on the premises. 99% of the patrons sit down and eat the food that is sold, but Peggy also sells takeaway coffees and customer could buy drinks in the bottle and take those away. Peggy needs some advice on whether or not the sale of bottled juices and water in a café setting is GST-free.

Is GST required for foreign services?

Q: M company is an Australian company, which owned by Australian shareholder and UK shareholder equally. The UK shareholder carries on a similar business in the UK under the same branding that the Australian company carries on in Australian. The Australian company has engaged the services of a digital marketing agency to do some advertising design. It has on charged some of the cost of the design to the UK company for design services. Is the on-charging of the design for UK company subject to GST?

Any GST liability incur when selling farmland?

Q: A proprietary limited company owned a large parcel of rural zoned land that was subdivided and sold. The remaining parcel held is 60ha. The previous sales of 40ha were done under s 38-480 of the GST Act (sale of farmland). The client is obtaining a development application to subdivide the balance lot into two parcels- 57ha and 3ha. The 3ha block has a homestead that is uninhabitable, some farming equipment are on it. The area has never been used due to its nature. Will the company incur GST liability for the sale of the 3ha subdivision? Can the company continue to apply s38-480 to the 57ha lot provided it continues with the farmland characteristics?

GST for the boat

Q: One client is looking into purchasing a boat for personal use. Here are the details:

GST of the Company

Q: A client (Mr. A) is a mortgage broker and adviser trading in a company structure. He is a director and shareholder of the company. His wife is also a shareholder, director and employee of the company. The company is not registered for GST as the total turnover so far is less than $75,000.

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