What does the MBI decision mean for the retirement village sector?
By Rhys Guild and Rebecca Healy
The Full Federal Court handed down its appeal decision in MBI Properties Pty Ltd v Commissioner of Taxation  FCAFC 112 on 18 October 2013, regarding the goods and services (GST) consequences arising from the sale of leased residential property as a going concern.
The key issue considered in this case was whether a purchaser was liable to pay GST under Division 135 of the GST Act when they bought a leased residential building as a GST-free going concern. Until this case, it had been widely accepted (and vigorously asserted by the ATO) that such a liability was triggered by the purchaser making input-taxed supplies of leasing residential premises under the existing leases.
However, somewhat surprisingly, the Full Federal Court held that the purchaser could not be liable for the Division 135 GST liability because it did not make a supply of those leases. In other words, the leases were a supply made by the vendor when they were originally granted, so because the purchaser did not make any new supply it could not be subject to the Division 135 GST liability…
If you are registered and logged in to the site, click on the link below to read the rest of the Minter Ellison briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Minter Ellison
News from The Lawyer
Briefings from Minter Ellison
The ASX has amended its operating rules to enhance disclosure requirements and facilitate the expansion of exchange traded funds.
Government to crack down on multinationals and profit-shifting, while encouraging small enterprises.