News & Events

  • Striking a balance - changes to off-the-plan contracts in NSW

    Striking a balance - changes to off-the-plan contracts in NSW

    Following the discussion paper “Off-the-plan contracts for residential property” released by the NSW Office of the Registrar General in November 2017, the NSW Government has introduced and assented to the Conveyancing Legislation Amendment Bill 2018. The (now) Conveyancing Legislation Amendment Act 2018 No 75 (NSW) introduces new protections for purchasers buying off-the-plan and brings the legal framework up to speed with the shift to electronic conveyancing. The commencement date of the Act is still to be set by proclamation.

    The changes introduced by the Conveyancing Legislation Amendment Act 2018 No 75 (NSW) include: 

    1. A new vendor disclosure regime, which includes the requirement for vendors to attach a disclosure statement to the contract. Aside from a copy of a draft plan prepared by a registered surveyor, the information and documents which are to be detailed or attached to the disclosure statement are not yet known as they are yet to be prescribed by the regulations but are expected to include the proposed by-laws and a schedule of finishes. The regulations will also determine the remedies and relief available to purchasers where a vendor fails or refuses to comply with the requirement.

      Vendors will also be required to:

      1. Notify purchasers upon becoming aware that the disclosure statement was inaccurate (at the time of signing) or has become inaccurate to a material particular. This might include a change to the draft plan or a change to the schedule of finishes that is likely to adversely affect the use or enjoyment of the lot.

        The purchaser must be informed of the change at least 21 days before completion. In some instances this change will give the purchaser a right to rescind.

      2. Serve purchasers with a copy of the registered plan and any other document registered with the plan. Purchasers will not be required to complete the contract earlier than 21 days of receipt of the documents.
    1. The tightening of regulations surrounding the vendor’s right to rescind under sunset clauses. Vendors will soon be required to obtain the consent of each purchaser under the contract in order to rescind following the expiry of the date by which the strata plan (and creation of the lot) and issue of the occupation certificate are to issue (the sunset date). If the purchaser refuses to provide its consent, the vendor will be required (unless the regulations stipulate otherwise) to obtain an order of the Supreme Court permitting the vendor to rescind.
    1. An extension to the cooling off period to 10 business days (currently 5 business days).
    1. Modernising the conveyancing process to allow for contracts, instruments and deeds to be formed and signed electronically.

    It is not surprising that the NSW Government has introduced such protectionist changes, particularly given the media attention surrounding the use of sunset clauses by vendors. Hopefully these changes will also lead to greater confidence and growth in the industry.

    If you have any questions about purchasing off-the-plan, please get in touch with our Property Team.


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  • An Opal in the rough the impact of the Opal Tower calamity in the ACT

    An Opal in the rough: the impact of the Opal Tower calamity in the ACT

    Residents of Opal Tower were recently given a rude shock when forced to vacate their apartments on Christmas Eve. Cracks appeared on several levels of the 36 storey mixed use building in Sydney only completed in August 2018. The ongoing saga involving residents, builder Icon and developer Ecove is a cautionary tale for anyone buying an off-the-plan unit or involved in the construction process. However, what steps can you take to avoid a similar situation and remedy structural defects if you are a buyer and conversely, what should you consider if a buyer subsequently claims that the building or renovation you have constructed is defective?

    Defect liability period

    Most contracts in the ACT for the purchase of an off-the-plan unit or construction of a single dwelling contain a defect liability period. This permits the buyer to submit a list of defects to the builder (or developer) which the builder will be required to repair. Defects are generally considered to be flaws in construction due to improper materials or faulty workmanship. However, it is important to be aware of the particular defects liability provisions as these can be drafted to limit the defects required to be repaired. Often this is reasonable, for example by excluding defects covered by manufacturer’s warranties. However, these provisions can also include unreasonable exemptions, for example, ‘settlement cracks’. The defect liability period will also set a defined period for the buyer to submit the defect list. A builder will not be required to rectify any defect notified outside of this period.

    Statutory Building Warranties

    Where a defect is revealed after the end of the defect liability period, often the only recourse available for defective building work is for breach of a statutory warranty (found in the Building Act 2004 (the Act). The Act implies important warranties into contracts with respect to carrying out residential building work or for the sale of a residential building, that provides the work will be carried out in accordance with the Act and the approved plans, in a proper and skilful manner and good and proper materials were used.
    These warranties exist for a period of 6 years in respect of structural defects and 2 years in respect of non-structural defects. Although considering the case Koundouris v The Owners – Units Plan No 1917 (2017) ACTCA 36 a buyer may be able to make a claim after the end of the six year period if the builder was in breach of the warranty at the end of the warranty period or if further building work is undertaken.


    While the ACT has not experienced its own Opal Tower yet, issues with defect building work nonetheless remains topical and the ACT courts have generally adopted a pro-buyer approach. Regardless, those buying off-the-plan should conduct due diligence to ensure that the contract protects their interest and that they seek legal advice on options available if a defect is revealed after the end of the defect liability period. Builders and developers should ensure their contracts are adequately drafted so that only reasonable defects are required to be repaired and seek legal advice if a buyer claims breach of a statutory warranty.

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  • tripping up maintaining footpaths from a duty of care perspective

    Tripping Up: Maintaining Footpaths from a Duty of Care Perspective

    On 18 December 2018, the NSW Court of Appeal handed down a decision that will impact the way a commercial occupier’s duty of care is measured in regards to accidents that may occur on their premises.

    In Bruce v Apex Software Pty Limited t/as Lark Ellen Aged Care [2018] NSWCA 330, Mrs Bruce, a retired 70 year old, tripped outside the entrance of an aged care facility where her elderly father resided, causing her to suffer injury. The path on which she tripped was relatively standard, consisting of concrete slabs boarded by rows of red bricks. At the heart of the dispute, there was a height discrepancy of 10-20mm where the edge of the concrete met the red bricks, creating a “lip”. Predictably, Mrs Bruce tripped on the said lip.

    The NSW legislation on which the Bruce case was decided is comparable to the ACT’s (and other jurisdiction’s) civil liability legislation, making the NSW Court of Appeal’s decision a cautionary tale for business owners regardless of their location. In the case of each of NSW and the ACT, the general statutory principles for the court to consider are that:

    1. A person is not negligent in failing to take precautions against a risk of harm unless:
      1. the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
      2. the risk was not insignificant, and
      3. in the circumstances, a reasonable person in the person’s position would have taken those precautions
    2.  In determining whether a reasonable person would have taken precautions against a risk of harm, the court must consider the following (among other relevant things):
      1. the probability that the harm would occur if care were not taken;
      2. the likely seriousness of the harm;
      3. the burden of taking precautions to avoid the risk of harm;
      4. the social utility of the activity that creates the risk of harm.

    In relation to this, in Bruce, Meagher JA held:

    1. The defendant was not negligent in allowing the concrete lip to remain as it was, as the risk of tripping on it was insignificant.
    2. This was based on the obviousness of the path transitioning from concrete to red brick, which pedestrians on the path would observe and accommodate for. Interestingly, the fact that the path was outside of an aged care facility did not hinder the threshold of this duty.
    3. The obviousness of the risk discharged the obligation which the defendant otherwise may have had to warn of the presence of the lip.
    4. A reasonable person in the defendant’s position would not have taken action to reduce the unevenness in the path. The burden in doing so was not warranted in light of regular inspections of the area being undertaken, and the longstanding use of the path in a high thoroughfare area without incident established the risk to be insignificant

    This decision reaffirms the standard required by law for commercial occupants in conducting repairs and their due diligence in mitigating risk of injury on the premises. Specifically in this case, based on several different factors, the defendant was not liable for the injuries sustained by Mrs Bruce. Helpfully for defendants (and not so for plaintiffs), Bruce is a reminder that the presence of a risk that “could” be fixed by some forethought of the occupier does not equate to their being an obligation that the risk “must” be fixed.

    All cases will, of course, turn on their own facts. Where safety risks are identified by an occupier that reasonably can be attended to without any great burden arising, taking whatever reasonable steps that are available to prevent an incident from occurring is always the preferable path to follow.

    For more information about duty of care please contact our litigation team.

    Written by Ian Meagher and Zoe Zhang.

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  • Protecting Intellectual Property with Blockchain

    Protecting Intellectual Property with Blockchain

    In recent articles in this series, we have explored the basics of blockchain and some of the associated legal challenges that can arise from the proliferation of this technology across various industries. Despite the challenges, however, there are a number of exciting legal applications on the horizon. In particular, there are few areas of law that could benefit quite as much from the real-time, distributed and immutable nature of blockchain as intellectual property (commonly referred to as “IP”).

    Streamlining the IP life cycle

    When it comes to IP, it’s the nature of the beast that effective enforcement of rights will be predicated on keeping robust and comprehensive records regarding applications, registration, licencing, assignment, use and so on. For certain IP rights, much of this is centrally managed by IP Australia, but the burden is shared across all those who create or use valuable IP.

    These processes could be streamlined and strengthened with the use of blockchain. By incorporating the central IP registries onto a blockchain platform, this information could be fed into the system in real time, creating an immutable and time-stamped record of the IP ‘life cycle’. This would not only be of enormous benefit in terms of record keeping and rights management, but may be critically important to certain disputes where evidence of creation, use or goodwill plays a determinative role.

    Excitingly, this opportunity is one that has been recognised by IP Australia, which is undertaking trials of a ‘smart’ trademark that can be traced throughout the supply chain using a blockchain platform.

    Creation and proof: protecting unregistered IP rights

    In Australia, as with many jurisdictions, copyright is unregistered and comes into existence automatically on creation of an original work. As such, disputes can arise about creatorship where evidence of conception, originality or use is incomplete or uncertain. By using a blockchain platform as a registry of original works, copyright authors, owners and users can rely on tamper-proof and time-stamped evidence of ownership to give them peace of mind in protecting their IP rights.

    Managing IP rights

    Not only can blockchain enhance the establishment and protection of IP rights, it presents a unique opportunity for businesses to improve the management of those rights in everyday governance, dealings and transactions.

    For example, IP audits may be greatly simplified if businesses have access to a comprehensive, time-stamped and unchangeable record of all IP generated by or within the business, as well as all third party IP that it uses. This provides an important safeguard against liability for infringement of the IP rights of others due to poor governance or oversight, as well as an enhanced capacity to recognise and protect the value of the IP created within the business.

    The use of blockchain in this way may also reduce a lot of the ‘grunt work’ associated with the assignment of IP rights, such as in mergers and acquisitions, for which due diligence must be undertaken.

    In a more day-to-day sense, blockchain technology could also be employed in the form of smart contracts to streamline the execution and enforcement of IP licences. The self-executing nature of smart contracts means that IP owners can receive payment automatically and in real-time wherever their IP is used by third parties.

    Limitless opportunities

    By this point, it should be clear that the potential legal uses of blockchain are endless-and we’ve only just scratched the surface. The protection of IP rights can be enhanced in multiple other ways with the use of this technology, such as tracking and authenticating the provenance of products to tell a genuine from a fake, or helping to keep track of compliance with regulatory requirements.

    Stay tuned for our future articles on the potential uses of blockchain. In the meantime, if you have any questions about the protection and management of your IP rights, and how this may be impacted by the rise of blockchain, feel free to get in touch with our Business team.

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  • Business Breakfast Club December Summary

    Business Breakfast Club December Summary: Looking Forward, Looking Back - The Year That Was

    This month at Business Breakfast Club, we had a roundtable discussion on the standout issues of 2018 and the impact these issues will have in 2019. In particular, we discussed the changes to the Privacy Act, the introduction of the General Data Protections Regulation (GDPR), the proposed changes to bankruptcy legislation, the impacts of the recent Royal Commissions and changes in financial markets (to name a few).

    Privacy Law

    We revisited the changes to the Privacy Act in February of this year, which introduced a mandatory notification procedure for eligible data breaches. All entities bound by the Australian Privacy Principles (APPs) have new reporting obligations if there is an eligible data breach, namely, to notify the Office of the Australian Information Commissioner (OAIC) and any parties at risk because of the breach.

    We explored the type of harm individuals have suffered as a result of eligible data breaches and how these breaches have led to an increase in identity theft and online hacking. We discussed a real life experience of scam activity in Canberra that illustrated the high level of sophisticated online hacking that exists in the digital age. Eligible data breaches and instances of scam activity and identity theft must be kept in the forefront of a business’ risk management policies as it can undoubtedly have serious consequences such as loss of personal savings.

    The European Union also passed similar privacy legislation (the GDPR) regulating how companies protect citizens’ personal data. The GDPR is designed to give EU citizens’ control of their personal data and simplify the regulatory environment for international businesses by unifying the regulation within the EU. If you are engaging an overseas entity that is bound by the GDPR and that entity is collecting and storing personal information provided by you (or for your benefit), we recommend you seek legal advice about whether the overseas entity’s privacy policy is compliant with the GDPR.

    Bankruptcy Legislative Changes

    We also discussed the proposed changes to insolvency laws, currently before Parliament, which could see the bankruptcy discharge period in Australia reduced from three years to one. The proposals are contained in the Bankruptcy Amendment (Enterprise Incentives) Bill 2017. It’s unlikely the Bill will be enacted before the Federal election next year. Many suggested that the current debt arrangements mean that individuals are paying more to their creditors and are locked in for longer than three years but if the Bill is enacted such arrangements would end altogether.

    For more information on any of the above, please contact Lauren Babic. The next Business Breakfast Club will take place on 15 February 2019. If you would like to attend, please contact us.

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  • To sell, or not to sell That is the question (in deceased estates)

    To sell, or not to sell? That is the question (in deceased estates)

    Rare are the circumstances where “The Tax Man” offers any dispensation from our tax-paying duties. Death is one of those circumstances.

    Deceased estates enjoy roll over relief from the payment of capital gains tax.[1]  One power of an executor (or administrator, where there is no will) is to decide how assets within an estate are dealt with. Subject to any specific direction in a will, an executor will ordinarily have the power to sell assets. They will also have the power to appropriate certain assets in-specie, and apply them towards a beneficiary’s share of the estate.

    For example, an estate may have two equal residuary beneficiaries with the assets comprising $200,000.00 cash and shares Medibank Private Limited also valued at $200,000.00. In discharging their duties, the executor could give beneficiary 1 $200,000.00 and could transfer the shares to beneficiary 2.  While these types of decisions are often made in consultation with the beneficiaries, the executor generally does not require the consent of the beneficiaries to make these decisions.

    Where there are multiple beneficiaries of an estate, from a practical point of view, often the easiest thing for an executor to do is say “show me the money”. That is, an executor elects to sell an asset within the estate. It is then easy to divide the sale proceeds among the various beneficiaries with little argument. Executors are often pressured by beneficiaries who have large debts and would prefer to receive “liquid” funds. However, from a tax perspective, often it is not prudent for an executor to engage their powers of sale.

    The sale of assets within an estate will often attract the payment of capital gains tax liabilities. However, where assets are transferred to beneficiaries of an estate, there are no immediate tax consequences.[2] On transfer, The Tax Man allows you to “roll over” or defer the tax consequences until some later time or event.

    The general rule of thumb is that if the deceased person would have been entitled to reduce or disregard a capital gain while they were alive, that right continues in the estate. The right continues for a two year period beyond the date of the deceased’s death.[3]

    For example, let’s say that at the date of Lucy’s death, she:

    • owned 500 Commonwealth Bank shares in her sole name, valued at $36,650.00. Lucy purchased the shares in 2005 for $20,000.00 (at $40.00 per share);
    • owned 500 National Australia Bank shares in her sole name, valued at $12,240.00. Lucy purchased the shares in 1984 for $7,500.00 (at $15.00 per share); and
    • was the sole Registered Proprietor of her home, where she lived until she died.

    Lucy left a will appointing Matthew her as her sole executor and nominating James as her sole beneficiary.

    On Lucy’s death, if Matthew transferred the Commonwealth Bank shares to James, there would be a capital gains tax rollover. No tax is payable on the transfer. James would enjoy the assets with the benefit of regular dividend payments. For calculating any future capital gains tax, James would acquire Lucy’s cost base when she initially purchased the shares ($40.00 per share).

    If James later sold the shares for $40,000.00 ($80.00 per share), he would have to pay capital gains tax on $60,000.00 (the difference between the ultimate sale price and Lucy’s purchase price). James may be entitled to a reduction in the tax depending on how long he retained the shares.[4]

    If Matthew, as the executor, elected to sell the Commonwealth Bank shares within the estate, there would be a capital gains tax event and the estate would be liable to pay tax on the gain. This would reduce the overall “value” of the inheritance being received by James.

    The National Australia Bank shares were acquired by Lucy in 1984, before capital gains tax was introduced. If Matthew sells these shares, there will be no tax payable. If Matthew transfers these shares to James, there will also be no capital gains tax payable. James would acquire the shares at their value on Lucy’s death.

    In relation to the main residence of the deceased person, there is an exemption from paying capital gains tax.[5]  While it is a complicated area of law, if an executor sells the deceased’s main residence, provided settlement is effect within two years of deceased’s death, the sale proceeds will be exempt from capital gains tax.

    Any income earned beyond the date of the deceased’s death (by way of dividend payments, share sales etc.) must be declared in a separate tax return filed on behalf of the estate. This is another obligation of an executor. The estate requires its own tax file number because it is a separate tax paying entity. The estate is treated like an individual for tax purposes and can take advantage of the tax free threshold for three years. Because of this, if assets within an estate are to be sold, there is merit in spanning the sales out over several financial years.

    While selling assets within an estate may seem like an easy and efficient way to approach the estate administration, executors should seek legal and accounting advice before relying on the powers of sale bestowed upon them.


    [1] Income Tax Assessment Act 1997 (Cth) Division 128.

    [2] Provided those transfers are consistent with the terms of the will or the applicable intestacy laws.

    [3] Income Tax Assessment Act 1997 (Cth) Section 152.80.

    [4] Income Tax Assessment Act 1997 (Cth) Division 115.

    [5] Income Tax Assessment Act 1997 (Cth) Division 118.

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  • Co-Operatives and the Power of Blockchain

    Co-operatives and the Power of Blockchain

    In our first article in this series, we stepped through the basics of blockchain and how it might influence the way we transact with one another. Blockchain is rapidly finding its way into all sorts of enterprises, presenting exciting opportunities for businesses to optimise their business operations. It might be surprising to consider that there are few pairings that are more natural-and perhaps less expected-than blockchain and co-operatives.

    Co-operatives and blockchain share a theme of mutual benefit: they exist to serve their members. At their core, the members are a group of people working together towards achieving shared social, cultural or economic goals. Importantly, this form of organisation is distinct from many typical corporate structures where the ultimate purpose for directors is always to serve their shareholders.

    In simple terms, a co-operative is a legal entity owned and democratically controlled by its members, who typically have a close association with the business of the co-operative. Common and historically successful co-operatives are those in the agricultural sector, including those in the dairy, grain, and meat export industries. The co-operative model shares risk and reward amongst its members. They are also “decentralised” in that there is no one member in a position of power or control above the others. This element of democratic control is a core element of the co-operative structure. Coincidentally, this decentralised notion of power and democratic control is also a core element of blockchain.

    Blockchain is the technology that allows, for example, crypto-currency such as Bitcoin to exist without a central bank. It provides a secure, decentralised and un-editable record of all transactions.

    So, think of a co-operative as the corporate structure and blockchain as the technological vehicle.


    Blockchain may be of particular use to co-operatives in relation to their governance. For example, it can enable co-operatives to operate on a system in which by-laws, amendments, terms of membership and voting rosters are all written into a blockchain, providing an irrefutable history of all legal and administrative procedures.

    Blockchain can provide a trusted mechanism for operational activities such as decision-making, finance and record-keeping without the need for physical proximity. That is, with blockchain, a co-operative can be governed remotely, without the need for members to physically meet or even align schedules (possibly in different time zones) for teleconferences. It can be coded to action and deal with common business matters like voting functions, for example, which could be “built-in” to the chain to record (and action) acceptance or rejection of by-laws, amendments, membership and other matters requiring a vote.


    Beyond these legal and administrative functions, co-operative entities around the world are utilising blockchain technology in various ways to support their activities. For example, one of the world’s largest consumer co-operatives, Co-Operative Group Ltd (UK), is working with an organisation called Provenance to use blockchain to trace the journey of fresh produce from ‘paddock to plate’ in real-time. By referring to this immutable and time-stamped record of a product’s processing, final purchasers can be assured of the origin and quality of the product, as well as environmental and social impacts of the business.

    Blockchain undoubtedly has the ability to enhance trust and efficiency to the operational activities of a co-operative. We look forward to seeing the benefits of this technology become a reality in Australia.

    If you have any questions about how blockchain might benefit you or your business, please get in touch with Mark Love. If you have any questions about co-operatives, please get in touch with Katie Innes.

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  • PPSR registration

    PPSR: Your registrations may be expiring soon!

    The Personal Property Securities Register is turning seven! The PPSR came into effect on 30 January 2012 so a number of security interests first registered in 2012 will be due to expire in the coming year. As we have said time and time again, the Personal Property Securities Act and the PPSR are about registration; it is no longer about ownership rights. So maintaining and protecting your registration is essential.

    Security interests can be registered for seven years or less, more than seven years but less than 25 years, or with no stated end time. A number of businesses may have chosen to register a security interest for seven years or less for two reasons:

    1. it is the cheapest available registration; or
    2. it is the maximum timeframe you can register an interest over ‘serial numbered goods’ – think motor vehicles, aircrafts, and intellectual property.

    To maintain your security interests (and protect your priority against other creditors who may have registered subsequently) you need to ensure that your registration doesn’t expire. Renewing and extending the registration is simple; the same fees apply to extending a registration as creating a new registration. The PPSR also allows secured parties to generate reports on which registrations are due to expire so you can manage your interests.

    The risk to you – once your security interest has expired, is that you cannot extend or renew it. Instead you will have to re-register your security interest and potentially lose your priority to other creditors who have registered earlier.

    If you have any questions about when your security interests may expire or security interests generally, please get in touch with our Business team.

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  • GST Withholding Tax

    GST Withholding Tax

    We have now had the best part of 5 months to ‘wrap our minds’ around the new GST withholding law in action. The new law broadly means that when new residential premises or potential residential land is sold, it is now the buyer who must account to the ATO for any GST payable. With the exception of the withholding notice that is to be provided to the buyer, the administration of GST in respect of the sale of second-hand residential property has not changed (in most cases), it is still GST exempt as an input-taxed supply.

    The result of this law[1] change is nothing new- GST has always been payable on sales of new residential premises and potential residential land. The change means that instead of asking the seller to make sure the GST is paid to the ATO upon the sale of the property, the buyer is now tasked with the job. This change effectively means that the buyer gets to play the role of both compliance officer and tax collector (which, let’s face it, is a bonus for all those buyers out there). But we shouldn’t ‘scoff’; according to the Explanatory Memorandum of the Bill that introduces the change, the GST debt in respect of insolvent entities was at almost $2 billion as of November 2017.

    Obligations of Note

    The obligations initiated by the changes are not overly onerous but they are important for anyone looking to either sell or buy one of the qualifying properties. Primarily, the reason for this is the penalties that can be imposed. For instance, if a buyer forgets or fails to withhold and pay to the ATO the required GST amount, then the buyer can be liable for a penalty that matches the GST amount that they should have remitted. Similarly, if the seller forgets or fails to notify the buyer of the need to withhold GST, harsh financial penalties can also be imposed on them as well ($21,000 for individuals and $105,000 for companies).[2] With this in mind, we urge anyone looking to buy or sell to seek advice in relation to these obligations prior to exchanging contracts.

    Issues of Interest

    The ACT and NSW Law Societies have adjusted the standard legal provisions used within contracts of sale to reflect these changes; however, we have found that many legal firms are including their own specific clauses to deal directly with the changes. It is important that any potential buyer or seller ensures that they understand these provisions as they won’t always be uniform from firm to firm. If these clauses are drafted incorrectly and do not mirror the law’s requirements they can potentially expose both parties to the onerous penalties outlined above.

    Something else to keep in mind here is the actual payment of the GST. For instance, many sellers require that the GST amount is provided to them at settlement to ensure expediency of payment and to allow them to claim the requisite credits in their correct BAS. Buyers on the other hand, need to be wary of this arrangement as it does not (arguably) extinguish their obligations under the law, potentially opening them up to the penalties mentioned above.

    Arguably one of the more confusing aspects of the new regime for sellers relates to which entity is actually responsible for the payment of GST. Under the new regime the seller is required to notify the buyer of certain information so that the buyer can make the appropriate payment to the ATO. This information includes the supplier’s name (and other details like ABN etc.). Normally, the supplier is the seller, however in practice this is not always the case. This could be due to the seller acting as trustee of a trust- in this situation the trust itself may be the entity liable for the GST, or there may be a number of sellers which make up a partnership and that partnership may be the entity registered for GST and liable for the GST on the sale. The seller could also belong to a closely held group of entities and another member of that group is in fact the one responsible for the GST.

    What this all means is that if the incorrect entity is noted as the supplier and therefore liable for the GST, the associated input tax credits will not be assigned to the correct entity (that is, the one actually registered for GST and liable for it).

    On its face this law seems relatively simple to grasp and in most respects it is. The administrative obligations of the new regime (some of which are identified above) are ‘necessary evils’ to facilitate compliance with the law. They are important and both sellers and buyers alike need to be aware of them and the consequences associated with failure to comply.

    If you require assistance with GST withholding issues, please contact Benjamin Grady.

    [1] Treasury Laws Amendment (2018 Measures No. 1) Bill 2018

    [2] Paragraph 5.42 of the Explanatory Memorandum to the Bill


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