On Tuesday 14 February 2012, the Government released draft
legislation aimed at resolving a conflict between two competing
divisions of the GST law. If passed, the draft legislation will
give legislative support to the administrative position recently
adopted by the Tax Office concerning the GST reporting obligations
of mortgagees in possession of company owned property.
Background
On 4 December 2009, the GST rules for representatives of
incapacitated entities were amended to ensure that representatives
of incapacitated entities would be responsible for the GST
consequences arising during their appointment. Those 2009
amendments brought about unexpected consequences for a mortgagee in
possession of company owned property. Concern about the potential
impact of these earlier amendments on mortgagees was initially
flagged in a Gadens Lawyers Tax Update in March
2010.
