ATO seeks to secure future GST Liability!
Following the outcome from the receant case Keris Pty Ltd v ATO, the judgment highlighted the Commissioners notice to the Company to provide security for a future GST liability was valid.
Indeed the imposing of such a measure by the Tax Commissioner is something that the Commissioner has done given the circumstances surrounding Keris past tax payment dealing with the ATO. The security deposit was imposed as a registered mortgage on the Companies development land. The directors of Keris argued that the measure will inhibit the Companies ability to act commercially. Possibly impose restrictions on finance and potential viability of the venture.
This is a discretionary power imposed by Parliament for the Commissioner to protect its GST liability. For property developers, it is an excellent lesson on ensuring that not meeting your tax obligations as a Property Developer will place your activities in the ATO Radar.
The ATO is aware of how some developers will seek to avoid paying GST or disregards some property transactions for GST purposes
What the ATO may do at the start of your property development project!
I am aware that at the start of a significant GST claim or development the ATO will make enquiries via the taxpayer, google maps and other sources to establish what potential Tax obligations you may have. Our recommendations for any business in the Property Development game is to plan . Plan cash flow and how taxes and finance will impact on your project. The treatment of GST and the retaining of new residential property for rentals all impact on your Property Development. Plan it right and you minimise falling into the trap of not meeting your ATO obligations.