Hi Guys,
We have some GST 'worries'. We've asked our Accountant and I'm not convinced the IRD would take the same view as him from my reading of the IRD site. I'd be happier if someone else supported his view.
We have been running an accommodation business (weekender) as sole traders (Joint Ownership) at our property in Location A for some time. Turnover $20,000 per annum so not registered for GST.
We have just started letting part of another house we own in Location B as short term furnished accommodation. It was previously let unfurnished as long term accommodation with a tenancy agreement. The house is owned by an LAQC of which we control 50% each. The turnover for this will be on the cusp of hitting the $40,000 mark.
Two semi related sets of questions.
1. For GST purposes are these separate entities as the ownership is different? If location B turns over less than $40,000 for any twelve month period can we avoid registering for GST or do we have to add the Location A and B income together? (Associated Parties)
2. If we do have to Register for GST at Location B because we turnover more than $40,000, thus ignoring the outcome of the previous questions, how does GST work in relation to the house that we are using to derive the income.
I presume without a change of ownership we can't claim a GST refund for a ninth of its value now we are using it for a GST related activity?
What happens if we want to sell the place? Do we have to pay GST on the amount we receive for its sale?
The GST guide says it might be zero rated if we sell it as a going concern to another GST registered party.
What if we change its purpose back to long term residential. Do we then have to pay a ninth of its market value as GST as it will be an asset that we have to take into account when we de-register for GST?
If anyone has the time to answer these I'd be grateful.
Thanks in advance
N & LJ
We have some GST 'worries'. We've asked our Accountant and I'm not convinced the IRD would take the same view as him from my reading of the IRD site. I'd be happier if someone else supported his view.
We have been running an accommodation business (weekender) as sole traders (Joint Ownership) at our property in Location A for some time. Turnover $20,000 per annum so not registered for GST.
We have just started letting part of another house we own in Location B as short term furnished accommodation. It was previously let unfurnished as long term accommodation with a tenancy agreement. The house is owned by an LAQC of which we control 50% each. The turnover for this will be on the cusp of hitting the $40,000 mark.
Two semi related sets of questions.
1. For GST purposes are these separate entities as the ownership is different? If location B turns over less than $40,000 for any twelve month period can we avoid registering for GST or do we have to add the Location A and B income together? (Associated Parties)
2. If we do have to Register for GST at Location B because we turnover more than $40,000, thus ignoring the outcome of the previous questions, how does GST work in relation to the house that we are using to derive the income.
I presume without a change of ownership we can't claim a GST refund for a ninth of its value now we are using it for a GST related activity?
What happens if we want to sell the place? Do we have to pay GST on the amount we receive for its sale?
The GST guide says it might be zero rated if we sell it as a going concern to another GST registered party.
What if we change its purpose back to long term residential. Do we then have to pay a ninth of its market value as GST as it will be an asset that we have to take into account when we de-register for GST?
If anyone has the time to answer these I'd be grateful.
Thanks in advance
N & LJ
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