Private ruling: GST and general law partnerships
Published: November 2014

Ruling: Q1: Are you liable for GST on the sale of the new residential units? | A1: Yes, you (the partnership trading as ABC Developments) will be making taxable supplies when you sell new residential premises and will be liable to report and pay GST in relation to those sales.

Relevant facts and circumstances: A Pty Ltd & B & C Pty Ltd (You) registered as a partnership for GST. You trade as ABC Developments The three partners, A Pty Ltd & B & C Pty Ltd own a block of land as tenants in common. You intend to develop the Property by removing the existing dwelling and constructing new residential units for sale. The Property was jointly acquired by the partners under a single contract. The three partners are each registered for GST in their own right. You were established as a vehicle to enter into contracts, purchase goods and pay fees in relation to the development/construction of the units. It is intended that the partners will contribute into a partnership account on an 'as required basis' in order to pay any bills relating to the development. On completion of the development the balance of the partnership account will be distributed to the partners. The development is expected to be completed in approximately two years. Proceeds from the sales of the new residential premises will not be paid into the partnership account. The proceeds will be paid into the individual partners accounts in the ratio of the partner's interest being: • 50% - A Pty Ltd; • 25% - B Pty Ltd; and • 25% - C.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | Section 184-1