CALL US: (07) 3367 0999 | EMAIL US:

GST at settlement

As of 1 July 2018, purchasers of new residential premises or potential land are required to withhold an amount from the contract price and pay the amount to the ATO before settlement.

A supplier (vendor, seller) of residential premises or potential residential land must notify the purchaser in writing whether they will need to withhold an amount. If the purchaser is required to withhold, the supplier will need to inform them of the amount and when it needs to be paid to the Tax Office.

Generally, if the property contract sale specifies an amount that is the price of the supply, i.e., the contract price, then the withholding amount is calculated on the contract price. However, there are some situations where the amount to be withheld must be calculated differently, including:
– Where the margin scheme applies to the supply
– The supply is between associates and is without consideration, or is for consideration that is less than the GST inclusive market value of the supply
– There is a mixed supply, for example, only partly a supply of new residential premises or potential residential land
– There are multiple purchasers (not joint tenants)

Once the supplier lodges their BAS and it is processed, the supplier will receive a credit for the amount the purchaser withheld and paid to the ATO.

Note, purchasers do not need to register for GST just because they have a withholding requirement.

Business
advice

taxation
planning

compliance
services

News

Proactive consolidation with ILBAs

November 13, 2019

Inactive low-balance accounts (ILBAs) are a new category account that needs to be reported and paid to the ATO. This was introduced in the Treasury Law Amendment (Protect Your Superannuation Package) Bill 2019 that came into effect on 1 July 2019 after first being announced in the 2018-19 Federal Budget.

ILBAs are designed to protect accounts from fee erosion. Where possible, the ATO will proactively consolidate super on behalf of an individual.

A superannuation account is considered an ILBA if the following criteria are met:

Funds are required to identify ILBAs on 30 June and 31 December each year, then report and pay them to the ATO by the statement date.

Individuals that have an account that they do not want to be transferred to the ATO as an ILBA, can consolidate super accounts using ATO online services through myGov, contact their super fund for more information or authorise their super fund to provide a written declaration to the ATO.