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Edited version of private advice
Authorisation Number: 1051790540512
Date of advice: 15 December 2020
Ruling
Subject: Eligibility to apply the margin scheme
Question
Are you eligible to apply the margin scheme in accordance with Division 75 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes. You will be eligible to apply the margin scheme to your supply of new residential premises described in this private ruling.
This ruling applies for the following periods:
1 July 20XX - 30 June 20XX
1 July 20XX - 30 June 20XX
1 July 20XX - 30 June 20XX
1 July 20XX - 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
xxx (You) are registered for GST effective from xxx and are involved are civil construction.
On xxx, you purchased an existing residential property located at xxx (Property) from xxx.
The Property was purchased for $xxx and settled on xxx.
Your tax agent xxx confirmed that GST was not applied to the purchase of the Property. This was also evident in the purchase contract you provided to us.
You were granted a Planning Permit from xxx to build XXX new townhouses on the Property.
You subsequently demolished the Property and commenced the construction of seven new townhouses. These are likely to become known as:
• xxx; and
• xxx; and
• xxx; and
• xxx; and
• xxx; and
• xxx; and
• xxx
You anticipate that sale of the XXX new townhouses will take place xxx, depending on market conditions.
xxx also advised us that the purchaser/s of the new townhouses will either be using the property as their primary residence or will be making input taxed supplies on it.
The relevant contracts will be prepared pending the outcome of this ruling and will state that the Margin Scheme is to be applied upon the purchase of each of the seven townhouses.
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