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TAX LAWS AMENDMENT (2008 MEASURES NO. 5) ACT 2008 (NO. 145, 2008) - SCHEDULE 1 Goods and services tax and real property

TAX LAWS AMENDMENT (2008 MEASURES NO. 5) ACT 2008 (NO. 145, 2008) - SCHEDULE 1

Goods and services tax and real property

   

A New Tax System (Goods and Services Tax) Act 1999

1  After subsection 75‑5(1A)

Insert:

          (1B)  A supply that you make to your * associate is taken for the purposes of subsection (1) to be a sale to your associate whether or not the supply is for * consideration.

2  At the end of subsection 75‑5(3)

Add:

               ; or (e)  it is a supply in relation to which all of the following apply:

                              (i)  you acquired the interest, unit or lease from an entity as, or as part of, a * supply of a going concern to you that was * GST‑free under Subdivision 38‑J;

                             (ii)  the entity was * registered or * required to be registered, at the time of the acquisition;

                            (iii)  the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or

                      (f)  it is a supply in relation to which all of the following apply:

                              (i)  you acquired the interest, unit or lease from an entity as, or as part of, a supply to you that was GST‑free under Subdivision 38‑O;

                             (ii)  the entity was registered or required to be registered, at the time of the acquisition;

                            (iii)  the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or

                     (g)  it is a supply in relation to which all of the following apply:

                              (i)  you acquired the interest, unit or lease from an entity who was your * associate, and who was registered or required to be registered, at the time of the acquisition;

                             (ii)  the acquisition from your associate was without * consideration;

                            (iii)  the supply by your associate was not a taxable supply;

                            (iv)  your associate made the supply in the course or furtherance of an * enterprise that your associate * carried on;

                             (v)  your associate had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme.

3  After subsection 75‑5(3)

Insert:

          (3A)  Subparagraphs (3)(g)(iii) and (iv) do not apply if the acquisition from your * associate was not by means of a supply by your associate.

4  After subsection 75‑11(4)

Insert:

Margin for supply of real property acquired as a GST‑free going concern or as GST‑free farm land

             (5)  If:

                     (a)  you acquired the interest, unit or lease in question from an entity as, or as part of:

                              (i)  a * supply of a going concern to you that was * GST‑free under Subdivision 38‑J; or

                             (ii)  a supply to you that was GST‑free under Subdivision 38‑O; and

                     (b)  the entity was * registered or * required to be registered, at the time of the acquisition; and

                     (c)  none of subsections (1) to (4) applies;

the margin for the supply you make is the amount by which the * consideration for the supply exceeds:

                     (d)  if that entity had acquired the interest, unit or lease before 1 July 2000 and on that day was registered or required to be registered:

                              (i)  if you choose to apply an * approved valuation to work out the margin for the supply--an approved valuation of the interest, unit or lease as at 1 July 2000; or

                             (ii)  if subparagraph (i) does not apply--the * GST inclusive market value of the interest, unit or lease as at 1 July 2000; or

                     (e)  if that entity had acquired the interest, unit or lease on or after 1 July 2000 and had been registered or required to be registered at the time of the acquisition:

                              (i)  if the entity's acquisition was for consideration and you choose to apply an approved valuation to work out the margin for the supply--an approved valuation of the interest, unit or lease as at the day on which the entity had acquired it; or

                             (ii)  if the entity's acquisition was for consideration and subparagraph (i) does not apply--that consideration; or

                            (iii)  if the entity's acquisition was without consideration--the GST inclusive market value of the interest, unit or lease as at the time of the acquisition; or

                      (f)  if that entity had not been registered or required to be registered at the time of the entity's acquisition of the interest, unit or lease (and paragraph (d) does not apply):

                              (i)  if you choose to apply an approved valuation to work out the margin for the supply--an approved valuation of the interest, unit or lease as at the first day on which the entity was registered or required to be registered; or

                             (ii)  if subparagraph (i) does not apply--the GST inclusive market value of the interest, unit or lease as at that day.

Margin for supply of real property acquired from associate

             (6)  If:

                     (a)  you acquired the interest, unit or lease in question from an entity who was your * associate, and who was * registered or * required to be registered, at the time of the acquisition; and

                     (b)  the acquisition from your associate was without * consideration; and

                     (c)  the supply by your associate was not a * taxable supply; and

                     (d)  your associate made the supply in the course or furtherance of an * enterprise that your associate * carried on; and

                     (e)  none of subsections (1) to (5) applies;

the margin for the supply you make is the amount by which the consideration for the supply exceeds:

                      (f)  if your associate had acquired the interest, unit or lease before 1 July 2000 and on that day was registered or required to be registered:

                              (i)  if you choose to apply an * approved valuation to work out the margin for the supply--an approved valuation of the interest, unit or lease as at 1 July 2000; or

                             (ii)  if subparagraph (i) does not apply--the * GST inclusive market value of the interest, unit or lease as at 1 July 2000; or

                     (g)  if your associate had acquired the interest, unit or lease on or after 1 July 2000 and had been registered or required to be registered at the time of the acquisition:

                              (i)  if your associate's acquisition was for consideration and you choose to apply an approved valuation to work out the margin for the supply--an approved valuation of the interest, unit or lease as at the day on which your associate had acquired it; or

                             (ii)  if your associate's acquisition was for consideration and subparagraph (i) does not apply--that consideration; or

                            (iii)  if your associate's acquisition was without consideration--the GST inclusive market value of the interest, unit or lease at the time of the acquisition; or

                     (h)  if your associate had not been registered or required to be registered at the time of your associate's acquisition of the interest, unit or lease (and paragraph (f) does not apply):

                              (i)  if you choose to apply an approved valuation to work out the margin for the supply--an approved valuation of the interest, unit or lease as at the first day on which the entity was registered or required to be registered; or

                             (ii)  if subparagraph (i) does not apply--the GST inclusive market value of the interest, unit or lease as at that day.

          (6A)  Paragraphs (6)(c) and (d) do not apply if the acquisition from your * associate was not by means of a supply by your associate.

          (6B)  To avoid doubt, you cannot be taken, for the purposes of paragraph (5)(f) or (6)(h), to be * registered or * required to be registered on a day earlier than 1 July 2000.

5  Subsection 75‑11(7) (heading)

Repeal the heading.

6  Subsection 75‑11(8)

Omit "Subsection (7)", substitute "Subsection (6) or (7)".

7  Subsection 75‑11(8)

Omit "subsection (7)", substitute "that subsection".

8  Section 75‑13

After "for the supply", insert "(whether or not the supply was for consideration)".

9  After section 75‑15

Insert:

75‑16   Margins for supplies of real property acquired through several acquisitions

             (1)  If:

                     (a)  you make a * taxable supply of * real property under the * margin scheme; and

                     (b)  the interest, unit or lease in question is one that you acquired through 2 or more acquisitions ( partial acquisitions ); and

                     (c)  one of the following provisions (a margin provision ) applies in relation to such a partial acquisition, or would so apply if the partial acquisition had been an acquisition of the whole of the interest, unit or lease:

                              (i)  section 75‑10;

                             (ii)  subsection 75‑11(1), (2), (2A), (2B), (3), (4), (5), (6) or (7);

the margin provision applies, in working out the margin for the supply you make, only to the extent that the supply is connected to the partial acquisition.

             (2)  The application of a margin provision in relation to one of the partial acquisitions does not prevent that margin provision or a different margin provision applying in relation to another of the partial acquisitions.

10  At the end of section 75‑22

Add:

             (3)  You have an increasing adjustment if:

                     (a)  you make a * taxable supply of * real property under the * margin scheme; and

                     (b)  an acquisition that you made of part of the interest, unit or lease in question was made through a supply that was * ineligible for the margin scheme because of paragraph 75‑5(3)(e), (f) or (g); and

                     (c)  the entity from whom you made the acquisition had been entitled to an input tax credit for its acquisition.

             (4)  You have an increasing adjustment if:

                     (a)  you make a * taxable supply of * real property under the * margin scheme; and

                     (b)  the acquisition that you made of the interest, unit or lease in question:

                              (i)  was made through a supply that was * GST‑free under Subdivision 38‑J or Subdivision 38‑O; or

                             (ii)  was made through a supply (other than a taxable supply) from your * associate without * consideration and in the course or furtherance of an * enterprise that your associate * carried on; or

                            (iii)  was made from your associate but not by means of a supply from your associate; and

                     (c)  the entity from whom you acquired the interest, unit or lease:

                              (i)  acquired part of the interest, unit or lease through a supply that would have been * ineligible for the margin scheme if it had been a supply of the whole of the interest, unit or lease; and

                             (ii)  had been entitled to an input tax credit for its acquisition; and

                            (iii)  was * registered or * required to be registered, at the time of your acquisition of the interest, unit or lease.

             (5)  The amount of the * increasing adjustment under subsection (3) or (4) is an amount equal to 1 / 11 of:

                     (a)  if you choose to apply an * approved valuation to work out the amount--an approved valuation of the part of the interest, unit or lease referred to in paragraph (3)(b) or subparagraph (4)(c)(i) as at the day on which the entity had acquired it; or

                     (b)  otherwise--the * consideration for the entity's acquisition of that part of the interest, unit or lease.

11  At the end of section 165‑5

Add:

Creating circumstances or states of affairs

             (3)  A * GST benefit that the avoider gets or got from a * scheme is not taken, for the purposes of paragraph (1)(b), to be attributable to a choice, election, application or agreement of a kind referred to in that paragraph if:

                     (a)  the scheme, or part of the scheme, was entered into or carried out for the sole or dominant purpose of creating a circumstance or state of affairs; and

                     (b)  the existence of the circumstance or state of affairs is necessary to enable the choice, election, application or agreement to be made.

12  Section 195‑1 (definition of margin )

Omit "and 75‑11", substitute ", 75‑11 and 75‑16".

13  Application

(1)        The amendments made by items 1 to 10 and 12 of this Schedule apply in relation to supplies that are supplies of things that the supplier acquired through a new supply to the supplier.

(2)        Division 75 of the A New Tax System (Goods and Services Tax) Act 1999 as in force immediately before the commencement of this Schedule continues to apply in relation to supplies that are not supplies of things that the supplier acquired through a new supply to the supplier.

(3)        The amendment made by item 11 of this Schedule applies in relation to choices, elections, applications and agreements made on or after the commencement of this Schedule.

(4)        In this item:

new supply means a supply that:

                     (a)  is made on or after the commencement of this Schedule; and

                     (b)  is not made:

                              (i)  under a written agreement entered into before that commencement; or

                             (ii)  pursuant to a right or option granted before that commencement;

                            that specifies in writing the consideration, or a way of working out the consideration, for the supply.