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LINAUS(Initiate)Initiate
10 Apr 2024

Individual tax payer.


Purchased land on margin scheme on 01/02/2020. At the time of purchase tax payer was not registered for GST. Cost $330K (incl.GST).


Tax payer begun registering for GST on 01/05/2020.


Subdivide and built a dwelling during 2021, equally divided with land size, value of land etc. Cost $440K for the sold dwelling only.


Sold one of the two dwellings on 01/05/2022 on Margin Scheme at $990K (incl.GST).


What is the GST upon sale of this property by using Margin Scheme is still ($990-$330k)/11? Or $990 K/11 only since at the time of purchase the tax payer was not registered for GST?




Thanks.


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Bruce4Tax(Taxicorn)Taxicorn
11 Apr 2024

still ($990-$330k)/11?


Yes


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LINAUS(Initiate)Initiate
16 Apr 2024

Thanks for confirming. I just couldn't find any ATO link or ruling about this. Do you have any reference if it doesn't cost you too much time to find. If it does, don't worry. thanks.

LINAUS(Initiate)Initiate
5 May 2024

@Bruce4Tax

Hi Bruce


Many thanks. When the tax payer purchased land initially in 2020 on Margin Scheme, per general settlement for this type of transaction, only 7% was GST withheld and paid to ATO, but I believe it's still ($990-$330)/11 for this tax payer to lodge GST upon sale later in 2022. NOT 990/11-330 x 7%. What's your opinion? Thank you.

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