75‑5 Applying the margin scheme75‑5 Applying the margin scheme

75‑5 Applying the margin scheme

(1) The *margin scheme applies in working out the amount of GST on a *taxable supply of *real property that you make by: (a) selling a freehold interest in land; or (b) selling a *stratum unit; or (c) granting or selling a *long‑term lease; if you and the *recipient of the supply have agreed in writing that the margin scheme is to apply. (1A) The agreement must be made: (a) on or before the making of the supply; or (b) within such further period as the Commissioner allows.

Note: Refusing to allow, or allowing, a further period within which to make an agreement is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

(1B) A supply that you make to your *associate is taken for the purposes of subsection (1) to be a sale to your associate whether or not the supply is for *consideration. (2) However, the *margin scheme does not apply if you acquired the entire freehold interest, *stratum unit or *long‑term lease through a supply that was *ineligible for the margin scheme.

Note: If you acquired part of the interest, unit or lease through a supply that was ineligible for the margin scheme, you may have an increasing adjustment: see section 75‑22.

(3) A supply is ineligible for the margin scheme if: (a) it is a *taxable supply on which the GST was worked out without applying the *margin scheme; or (b) it is a supply of a thing you acquired by *inheriting it from a deceased person, and the deceased person had acquired all of it through a supply that was ineligible for the margin scheme; or (c) it is a supply in relation to which all of the following apply: (i) you were a *member of a *GST group at the time you acquired the interest, unit or lease in question; (ii) the entity from whom you acquired it was a member of the GST group at that time; (iii) the last supply of the interest, unit or lease by an entity who was not (at the time of that supply) a member of the GST group to an entity who was (at that time) such a member was a supply that was ineligible for the margin scheme; or (d) it is a supply in relation to which both of the following apply: (i) you acquired the interest, unit or lease from the *joint venture operator of a *GST joint venture at a time when you were a *participant in the joint venture; (ii) the joint venture operator had acquired the interest, unit or lease through a supply that was ineligible for the margin scheme; or (e) it is a supply in relation to which all of the following apply: (i) you acquired the interest, unit or lease from an entity as, or as part of, a *supply of a going concern to you that was *GST‑free under Subdivision 38‑J; (ii) the entity was *registered or *required to be registered, at the time of the acquisition; (iii) the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or (f) it is a supply in relation to which all of the following apply: (i) you acquired the interest, unit or lease from an entity as, or as part of, a supply to you that was GST‑free under Subdivision 38‑O; (ii) the entity was registered or required to be registered, at the time of the acquisition; (iii) the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or (g) it is a supply in relation to which all of the following apply: (i) you acquired the interest, unit or lease from an entity who was your *associate, and who was registered or required to be registered, at the time of the acquisition; (ii) the acquisition from your associate was without *consideration; (iii) the supply by your associate was not a taxable supply; (iv) your associate made the supply in the course or furtherance of an *enterprise that your associate *carried on; (v) your associate had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme. (3A) Subparagraphs (3)(g)(iii) and (iv) do not apply if the acquisition from your *associate was not by means of a supply by your associate. (4) A reference in paragraph (3)(b), (c) or (d) to a supply that was ineligible for the margin scheme is a reference to a supply: (a) that was ineligible for the margin scheme because of one or more previous applications of subsection (3); or (b) that would have been ineligible for the margin scheme for that reason if subsection (3) had been in force at all relevant times.