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While many assets transferred as part of property settlements are private or personal assets, GST will need to be considered where business assets are involved.
If an asset, such as a car, held by a business entity, is transferred to a party to a relationship as part of a property settlement, the common sense GST analysis is that the business is making a taxable supply (in the course or furtherance of its enterprise) and will need to remit GST to the Commissioner. The party receiving the car may be entitled to Input Tax Credits [lTCs), to the extent the car is to be used for business purposes. The Commissioner takes a different view of how these types of transactions are dealt with.
Damian O'Connor, Special Counsel
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