Following on from my post on Monday about the events of last Friday, I note that that on the same day Treasury released an Exposure Draft of legislation intended to clarify the operation of the margin scheme, including a technical amendment to the provision dealing with subdivided land. Also, to cap off a busy week, the Commissioner published GSTR 2012/4 GST treatment of fees and charges payable on exit by residents of a retirement village operated on a leasehold or licence basis. My analysis of the Ruling can be accessed here.
Exposure Draft legislation
The legislation seeks to ensure that taxpayers are able to use the consideration method, the valuation method, or the GST-inclusive market value method, whichever is appropriate, when calculating the margin on a taxable supply of subdivided land.
Comments are due by 12 September 2012.
Links to documents:
The Explanatory Memorandum summarises the legislation as follows:
This Schedule removes doubt as to the use of an approved valuation o[f] GST inclusive market value to determine the margin for a taxable supply of a subdivided interest, unit or lease in real property. This is achieved by amended section 75-15 to expressly allow taxpayers, where relevant, to use a corresponding propotion of (as applicable):
- the consideration provided for the relevant acquisition of the land or premises from which the interest, unit or lease was subdivided;
- an approved valuation of the land or premises from which the interest, unit or lease was subdivided as at a specified date;
- the GST inclusive market value of the land or premises from which the interest, unit or lease was subdivided at a specified time;
to calculate the margin for a taxable supply of a subdivided interest, unit or lease in real property.
A consultation paper was released on 10 December 2010 and 12 submissions were received. These documents can be accessed below