This fact sheet accompanies QB 24/04, which considers when a subdivision project is an activity carried on continuously or regularly in the definition of “taxable activity” for GST purposes.

This question we’ve been asked sets out when a subdivision project is an activity carried on continuously or regularly in the definition of “taxable activity” for GST purposes.  It also sets out when the sale of subdivided land is a supply made in the course or furtherance of a taxable activity.

 

An employee share scheme is an arrangement for issuing or transferring shares in a company to past, present and future employees. The arrangement must be connected to the person's employment or service. The employee share scheme definition includes transfers to directors or shareholder-employees in a company, the transfer of shares in a group company and transfers to associates. 

This interpretation statement considers the available subscribed capital, treasury stock and dividend implications of a trustee of an employee share scheme holding shares as nominee.

This question we’ve been asked explains whether the employee share loan exclusion from fringe benefit tax can apply when an associate of the employee enters into a loan to acquire shares in connection with the employee’s employment.

This determination sets a revised depreciation rate for metal (scrap) recovery plant and a change to the asset class description.

GST: commercial dwelling; residential establishment; domestic goods and services; input tax deduction; zero-rated for the sale of land

Income tax: business income, capital nature, compensation, income under ordinary concepts, lump-sum payment, settlement payment

The Commissioner has released three public rulings on the GST treatment of supplies of properties by landlords to organisations for use in the Transitional Housing Programme of the Ministry of Housing and Urban Development (HUD): BR Pub 24/01, 24/02 and 24/03 (the Rulings).

This Operational Position gives guidance on how the Commissioner will apply the technical view set out in the commentary to the Rulings where landlords have taken incorrect tax positions in previous GST periods.

In brief:

• Where previous supplies made by landlords were incorrectly treated as taxable supplies (but were exempt supplies), the Commissioner does not expect assessments to be corrected to reverse input tax deductions if the landlord is subsequently making taxable supplies because of the organisation’s new arrangements.Doing so would only result in input tax deductions in a later period because under the arrangements covered by the Rulings there will have been a permanent change in use from making exempt supplies to making taxable supplies.

   

• In other situations, landlords should consider how the GST legislation applies to their individual circumstances and contact Inland Revenue (by sending a message in MyIR with “transitional housing” in the subject line) or their tax advisor to determine if they may have taken incorrect tax positions.Depending on the situation, several provisions of the GST legislation could be relevant, as referred to below.

These Public Rulings consider the GST treatment of supplies of properties by landlords to organisations for use in the Ministry of Housing and Urban Development’s Transitional Housing Programme. Many organisations don’t own their own properties so enter into leases for properties with private landlords (which may include developers, investors and motel owners). There had previously been some uncertainty with how the landlords account for GST. 

These items specify when the landlords will be subject to GST and when they have exempt supplies. BR Pub 24/01 applies to a supply of a property that will be an exempt supply on the basis that the property will be used for the principal purpose of accommodation in a dwelling. 

BR Pub 24/02 and BR Pub 24/03 apply to supplies of a property that will not be exempt supplies.  The commentary to these Rulings assists in determining whether the supply will be taxable or exempt. 

These rulings have been prepared in response to requests for clarity in this sector.  The conclusions in these items have no effect on the rent paid by transitional housing tenants, which is calculated based on a fixed proportion of their income. 

Any landlords with specific queries about their situation can send a web message through their MyIR account using “transitional housing” in the subject line and this will flow through to IR staff familiar with the issues in this area.