Insert:

Insert:

(2A)

A supply of the premises is disregarded as a sale for the purposes of applying paragraph (1)(a):

(a) if it is a supply by a member of a ^* GST group to another member of the GST group; or
(b) if:
(i) it is a supply by the ^* joint venture operator of a ^* GST joint venture to another entity that is a ^* participant in the joint venture; and
(ii) the other entity acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into.

Insert:

(1A)

If:

(a) while you were not a ^* member of any ^* GST group, you acquired or imported a thing; and
(b) you become a member of a GST group at a time when you still hold the thing;

then, when the ^* representative member of the GST group applies section 129-40 for the first time after you became a member of the GST group, the ^* intended or former application of the thing is the extent of ^* creditable purpose last used to work out:

(c) the amount of the input tax credit to which you were entitled for the acquisition or importation; or
(d) the amount of any ^* adjustment you had under Division 129 in relation to the thing;

as the case requires.

Repeal the paragraph, substitute:

(a) either:
(i) while you were a ^* member of a ^* GST group (the first GST group ), you acquired a thing (other than from another member of that group) or imported a thing; or
(ii) you acquired or imported a thing while you were not a member of any GST group, and you subsequently became a member of a GST group (the first GST group ) while you still held the thing; and

Omit ", under section 48-55".

After "to which", insert "you or".

After " ^* adjustment", insert "you or".

Repeal the heading, substitute:

Repeal the subsection, substitute:

(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 Division 7 of Part VI of the Taxation Administration Act 1953 ).

Repeal the subsection, substitute:

(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.

(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.

Omit "The margin ", substitute "Subject to subsection (3) and section 75-11, the margin ".

Omit "However", substitute "Subject to section 75-11".

Omit "a valuation", substitute "an ^* approved valuation".

Omit "that complies with any requirements determined in writing by the Commissioner for making valuations for the purposes of this Division".

Insert:

Margin for supply of real property acquired from fellow member of GST group

(1)

If:

(a) you acquired the interest, unit or lease in question at a time when both you and the entity from whom you acquired it were ^* members of the same ^* GST group; and
(b) on or after 1 July 2000, there has been a supply (an earlier supply ) of the interest, unit or lease that occurred at a time when the supplier was not a member of the GST group; and
(ba) the ^* recipient was at that time, or subsequently became, a member of the GST group;

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds:

(c) the consideration for the last such earlier supply, if the supplier and the recipient were not ^* associates at that time; or
(d) the ^* GST inclusive market value of the interest, unit or lease at that time, if the 2 entities were associates at that time.

(2)

If:

(a) you acquired the interest, unit or lease in question at a time when both you and the entity from whom you acquired it were ^* members of the same ^* GST group; and
(b) subsection (1) does not apply;

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds an ^* approved valuation of the interest, unit or lease as at 1 July 2000.

Margin for supply of real property acquired from joint venture operator of a GST joint venture

(2A)

If:

(a) you acquired the interest, unit or lease in question at a time when you were a ^* participant in a ^* GST joint venture and the entity from whom you acquired it was the ^* joint venture operator of the joint venture; and
(b) you acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into; and
(c) on or after 1 July 2000, there has been a supply (an earlier supply ) of the interest, unit or lease to the entity from whom you acquired it (whether or not that entity was the joint venture operator of the joint venture at the time of that acquisition);

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds:

(d) the consideration for the last such earlier supply, if the supplier and the ^* recipient were not ^* associates at the time of the earlier supply; or
(e) the ^* GST inclusive market value of interest, unit or lease at that time, if the 2 entities were associates at that time.

(2B)

If:

(a) you acquired the interest, unit or lease in question at a time when you were a ^* participant in a ^* GST joint venture and the entity from whom you acquired it was the ^* joint venture operator of the joint venture; and
(b) you acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into; and
(c) subsection (2A) does not apply;

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds an ^* approved valuation of the interest, unit or lease as at 1 July 2000.

Margin for supply of real property acquired from deceased estate

(3)

If:

(a) you acquired the interest, unit or lease in question by ^* inheriting it; and
(b) none of subsections (1) to (2B) applies; and
(c) the entity from whom you inherited the interest, unit or lease (the deceased ) acquired it before 1 July 2000;

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds:

(ca) if you know what was the consideration for the supply of the interest, unit or lease to the deceased and you choose to use that consideration to work out the margin for the supply—that consideration; or
(d) if paragraph (ca) does not apply and, immediately before the time at which you inherited the interest, unit or lease, the deceased was neither ^* registered nor ^* required to be registered—an ^* approved valuation of the interest, unit or lease as at the latest of:
(i) 1 July 2000; or
(ii) the day on which you inherited the interest, unit or lease; or
(iii) the first day on which you registered or were required to be registered; or
(e) if paragraph (ca) does not apply and, immediately before the time at which you inherited the interest, unit or lease, the deceased was registered or required to be registered—an approved valuation of the interest, unit or lease as at the later of:
(i) 1 July 2000; or
(ii) the first day on which the deceased registered or was required to be registered.

(4)

If:

(a) you acquired the interest, unit or lease in question by ^* inheriting it; and
(b) none of subsections (1) to (2B) applies; and
(c) the entity from whom you inherited the interest, unit or lease (the deceased ) acquired it on or after 1 July 2000;

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds:

(d) if you know what was the consideration for the supply of the interest, unit or lease to the deceased and you choose to use that consideration to work out the margin for the supply—that consideration; or
(e) if paragraph (d) does not apply—an ^* approved valuation of the interest, unit or lease as at the day on which the deceased acquired it.

Margin for supply of real property acquired from associate

(7)

If:

(a) you acquired the interest, unit or lease in question from an entity who was your ^* associate at the time of the acquisition; and
(b) none of the other subsections of this section apply;

the margin for the supply you make is the amount by which the ^* consideration for the supply exceeds:

(c) if your acquisition was made before 1 July 2000—an ^* approved valuation of the interest, unit or lease as at 1 July 2000; or
(d) if your acquisition was made on or after 1 July 2000—the ^* GST inclusive market value of the interest, unit or lease at the time of the acquisition.

(8)

Subsection (7) applies to an acquisition through a supply made by:

(a) a ^* GST branch; or
(b) a ^* non-profit sub-entity; or
(c) a ^* government entity of a kind referred to in section 72-95 or 72-100;

as if Subdivision 72-D affected the operation of subsection (7) in the same way that it affects the operation of Division 72.

In working out the ^* margin for a ^* taxable supply of ^* real property you make (the later supply ), if:

(a) you had acquired the interest, unit or lease in question through a supply (the earlier supply ); and
(b) the ^* consideration for:
(i) if your acquisition was not an acquisition from a ^* member of a ^* GST group of which you were also a member at the time of the acquisition—the earlier supply; or
(ii) if your acquisition was such an acquisition—the last supply of the interest, unit or lease at a time when the supplier of that last supply was not, but the ^* recipient of that last supply was, a member of the GST group;
had not been paid in full at the time of the later supply;

treat the amount of the consideration as having been reduced by the amount of unpaid consideration referred to in paragraph (b).

Note: If you subsequently pay more of the consideration for the earlier supply, you may have a decreasing adjustment: see section 75-27.

In working out the ^* margin for a ^* taxable supply of ^* real property you make to an entity who is your ^* associate at the time of the supply, treat the ^* consideration for the supply as if it were the same as the ^* GST inclusive market value of the interest, unit or lease at the time of the supply.

(1)

To avoid doubt, in working out the ^* consideration for an acquisition for the purposes of applying the ^* margin scheme to a ^* taxable supply of ^* real property, disregard:

(a) the cost or value of any other acquisitions that have been made by you, or any work that has been performed, in relation to the real property; and
(b) the cost or value of any other acquisitions that are intended to be made by you, or any work that is intended to be performed, in relation to the real property after its acquisition;

including acquisitions or work connected with bringing into existence the interest, unit or lease supplied.

(2)

This section does not affect what constitutes ^* consideration for a purpose not connected with applying the ^* margin scheme.

Omit "section 75-10", insert "sections 75-10 to 75-14".

Insert:

(1)

You have an increasing adjustment if:

(a) you make a ^* taxable supply of ^* real property under the ^* margin scheme; and
(b) an acquisition that you made of part of the interest, unit or lease in question was made through a supply that was ^* ineligible for the margin scheme; and
(c) you were, or are, entitled to an input tax credit for the acquisition.

The amount of the increasing adjustment is an amount equal to the ^* previously attributed input tax credit amount for the acquisition.

(2)

You have an increasing adjustment if:

(a) you make a ^* taxable supply of ^* real property under the ^* margin scheme; and
(b) you acquired all or part of the interest, unit or lease in question by inheriting it; and
(c) the entity from whom you inherited (the deceased ) had acquired part of the interest, unit or lease that you inherited through a supply that was ^* ineligible for the margin scheme; and
(d) the deceased was entitled to an input tax credit for that acquisition.

The amount of the increasing adjustment is an amount equal to the ^* previously attributed input tax credit amount for the acquisition.

Insert:

(1)

You have a decreasing adjustment if:

(a) section 75-12 applied to working out the ^* margin for a ^* taxable supply of ^* real property that you made; and
(b) after you made the supply, a further amount of the ^* consideration was paid for the earlier supply referred to in that section.

(2)

The amount of the decreasing adjustment is an amount equal to ¹ /11 of the further amount of the ^* consideration paid.

Add:

(1)

The Commissioner may, by legislative instrument, determine in writing requirements for making valuations for the purposes of this Division.

(2)

A valuation made in accordance with those requirements is an approved valuation .

A determination by the Commissioner, for the purposes of paragraph 75-10(3)(b) of the A New Tax System (Goods and Services Tax) Act 1999 , that was in force immediately before the commencement of this Schedule:

(a) continues in force on that commencement as if it had been made under section 75-35 of that Act as amended by this Act; and
(b) may be revoked or amended by the Commissioner in the same way as a determination under section 75-35.

Insert:

After "sections", insert "75-12, 75-13, 75-14,".

Insert:

Insert:

Insert:

Insert:

Omit "subsection 75-10(2)", substitute "sections 75-10 and 75-11".

Omit "you choose, under section 75-5, to use the margin scheme in working out the amount of GST on the supply", substitute "subsection 75-5(1) applies".

Taxation Administration Act 1953

Insert:

(1) The amendments made by this Schedule (other than items 3 to 7, 9 and 10) apply, and are taken to have applied, in relation to supplies made on or after the day the Bill for this Act was introduced into the Parliament.
(2) The amendments made by items 3 to 7 apply, and are taken to have applied, in relation to adjustments arising under Division 129 of the A New Tax System (Goods and Services Tax) Act 1999 on or after the day the Bill for this Act was introduced into the Parliament.
(3) The amendments made by items 9 and 10 apply only in relation to supplies that:

(a) are made under contracts entered into on or after the day on which this Act receives the Royal Assent; and
(b) are not made pursuant to rights or options granted before that day.