The ATO have requested we not film our session today, however, they have confirmed that their scheduled webinar, filmed elsewhere, will still occur and will be made available for viewing in the coming days along with a podcast and literature on the new measure/remittance.
AICWA members who attended yesterday’s sessions will be acutely aware that the ATO are placing considerable responsibility on the purchaser’s conveyancer to ensure the supplier (developer’s) statement is correct. The responsibility is noted under draft Rule 58 of “The Purchaser’s obligation to pay an amount for GST on taxable supplies of certain real property” states:
58. It would be unreasonable for a purchaser to believe the correctness of a notice indicating they do not have to make a payment under section 14-250 if it is clear that the vendor is making a taxable supply of new residential premises. For example, if a purchaser enters into an ‘off-the-plan’ contract for newly constructed premises from a developer who is registered for GST, and there is a statement in the contract that the purchaser does not have to make a payment under section 14-250 because the premises are not new residential premises.
How does this affect me?
The Rule leaves the door ajar for potential claims of negligence (penalties) against the purchaser’s conveyancer if they do not question the supplier’s statement and where it could be proven/asserted they had knowledge or reason to believe GST remittance was applicable.
Why are the ATO doing this?
It can be assumed that if Rule 58 was not in place and statement made by the supplier can be categorically relied upon by the purchaser, it would encourage/allow suppliers to issue false or incorrect statements. This would defeat the purpose of the measure in creating a regime to stop tax avoidance by some suppliers.
What has AICWA/AIC been doing to represent us?
AIC National via its representation on the ECG is working with various key stakeholders to raise awareness of the following concerning issues:
Some brief points of note:
Source:17th May 2018 AICWA e-Newsletter
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