I am as confused as all hell. Ten years ago my brother and I inherited our family property (two houses and two commercial property (all rented) and a block of vacant land. These are in both our names. Now if we sell the vacant land our accountant says we will be liable to pay GST as it would seen as possibly a 'furtherance of the owner carrying on an enterprise' The land is on the balance sheet under our joint ownership partnership. I can't see how this is furthering an enterprise which is just rent gathering? I would appreciate some opinions and thoughts on this. Cheers.
Confused over GST and sale of vacant land
- Thread starter Lance12
- Start date
The ATO definition of furthering an enterprise is very broad. If you had sold the land 10 years ago that would have been a different matter but presumably you held the land with the intention of selling it at a profit. I would think that you may need to register for GST but you can use the margin scheme so it won't be hat bad. If you can argue that you held the land because it afforded a nice view or because you needed somewhere to park your car you might get away with it.
I didn't say they acquired the land with a profit motive in mind. But having acquired it, regardless of how it was acquired, the question then becomes, what would they intend to do with it. If the intention was to hold it for 10 years until it goes up in value then there was a profit motive in mind. I would have thought that with two commercial properties on their books earning rent it would be hard to argue otherwise. Why do you assume they aren't currently registered for GST?
dont know but it sounds like they are
i would still get a sceond opinion - if their business has been just collecting rent and this land is just a chunk of dirt inherited that was sitting there and they are relaising it sounds passive to me
