ATO Issues Crucial GST Reminder for Retirement Villages: Economy Update by Imogen Wilson

• ATO issued GST reminder for retirement villages
• Purchasers of operating retirement villages should expect increasing GST adjustments
• Increasing adjustment occurs if village is in operation and making a profit
• Input-taxed supplies through the village lead to increasing adjustment
• Adjustment is 10% of sale price multiplied by proportion of non-creditable use
• Input tax supplies by purchaser are considered non-creditable use
• Additional adjustments may be needed if proportion of non-creditable use changes
• Example of Wren acquiring a retirement village with input taxed supplies
• Wren subject to increasing adjustment due to non-creditable use
• Additional GST payable by Wren calculated as $1.158 million

Source: accountingtimes.com.au

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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