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A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 75.5

Applying the margin scheme

             (1)  The * margin scheme applies in working out the amount of GST on a * taxable supply of * real property that you make by:

                     (a)  selling a freehold interest in land; or

                     (b)  selling a * stratum unit; or

                     (c)  granting or selling a * long-term lease;

if you and the * recipient of the supply have agreed in writing that the margin scheme is to apply.

          (1A)  The agreement must be made:

                     (a)  on or before the making of the supply; or

                     (b)  within such further period as the Commissioner allows.

Note:          Refusing to allow, or allowing, a further period within which to make an agreement is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953 ).

          (1B)  A supply that you make to your * associate is taken for the purposes of subsection (1) to be a sale to your associate whether or not the supply is for * consideration.

             (2)  However, the * margin scheme does not apply if you acquired the entire freehold interest, * stratum unit or * long-term lease through a supply that was * ineligible for the margin scheme.

Note:          If you acquired part of the interest, unit or lease through a supply that was ineligible for the margin scheme, you may have an increasing adjustment: see section 75-22.

             (3)  A supply is ineligible for the margin scheme if:

                     (a)  it is a * taxable supply on which the GST was worked out without applying the * margin scheme; or

                     (b)  it is a supply of a thing you acquired by * inheriting it from a deceased person, and the deceased person had acquired all of it through a supply that was ineligible for the margin scheme; or

                     (c)  it is a supply in relation to which all of the following apply:

                              (i)  you were a * member of a * GST group at the time you acquired the interest, unit or lease in question;

                             (ii)  the entity from whom you acquired it was a member of the GST group at that time;

                            (iii)  the last supply of the interest, unit or lease by an entity who was not (at the time of that supply) a member of the GST group to an entity who was (at that time) such a member was a supply that was ineligible for the margin scheme; or

                     (d)  it is a supply in relation to which both of the following apply:

                              (i)  you acquired the interest, unit or lease from the * joint venture operator of a * GST joint venture at a time when you were a * participant in the joint venture;

                             (ii)  the joint venture operator had acquired the interest, unit or lease through a supply that was ineligible for the margin scheme; or

                     (e)  it is a supply in relation to which all of the following apply:

                              (i)  you acquired the interest, unit or lease from an entity as, or as part of, a * supply of a going concern to you that was * GST-free under Subdivision 38-J;

                             (ii)  the entity was * registered or * required to be registered, at the time of the acquisition;

                            (iii)  the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or

                      (f)  it is a supply in relation to which all of the following apply:

                              (i)  you acquired the interest, unit or lease from an entity as, or as part of, a supply to you that was GST-free under Subdivision 38-O;

                             (ii)  the entity was registered or required to be registered, at the time of the acquisition;

                            (iii)  the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or

                     (g)  it is a supply in relation to which all of the following apply:

                              (i)  you acquired the interest, unit or lease from an entity who was your * associate, and who was registered or required to be registered, at the time of the acquisition;

                             (ii)  the acquisition from your associate was without * consideration;

                            (iii)  the supply by your associate was not a taxable supply;

                            (iv)  your associate made the supply in the course or furtherance of an * enterprise that your associate * carried on;

                             (v)  your associate had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme.

          (3A)  Subparagraphs (3)(g)(iii) and (iv) do not apply if the acquisition from your * associate was not by means of a supply by your associate.

             (4)  A reference in paragraph (3)(b), (c) or (d) to a supply that was ineligible for the margin scheme is a reference to a supply:

                     (a)  that was ineligible for the margin scheme because of one or more previous applications of subsection (3); or

                     (b)  that would have been ineligible for the margin scheme for that reason if subsection (3) had been in force at all relevant times.



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