BLO2206 TAXATION LAW AND PRACTICE - ASSIGNMENT 2

ASSIGNMENT 2

Patrick is a builder who is registered for GST. He recently built two new residential houses on a residential block of land. Patrick used a number of contractors to help him with the building works and they charged him GST on their invoices. The properties were completed eleven months after he purchased the land.

Shortly after the building works were completed, Patrick sold one property to Sonia and kept the other as a residential rental property of his own. Sonia is planning on living in the property.
P is a GST registered entity
He is paying GST to sub-contractors= Input tax credit?
Sale to Sonia-can he pass on the GST he paid the sub -contractor to Sonia.
He is keeping one property for himself (private use) (What happened to the GST on this property. Is there any CGT consequences).

Required:
Prepare a professional letter of advice advising Patrick of the GST aspects during the building process, upon disposal to Sonia, and once he rented the second property. We recommend you review the textbook and ATO document QC 21960.