New Developments Pty Ltd (New Developments) is a property investment and development company. Recently, New Developments purchased an old warehouse which it is converting into apartments for sale. New Developments also owns an established apartment building, which it rents out to tenants. In the course of its activities, New Developments negotiates many contracts. It engages a busy independent lawyer, Rumpole Richardson, to assist in drafting and negotiating these contracts. Rumpole Richardson has a number of clients and turns over $250,000 per year in his legal advisory business. New Developments offered to allow Rumpole Richardson to live in one of its apartments rent-free in exchange for his legal work. Rumpole Richardson agreed to this arrangement. Normally, the rent payable on the apartment would be $22,000 per annum.

Advise New Developments and Rumpole Richardson of their GST obligations and any input tax credit entitlements they may have. Assume that New Developments is registered for GST purposes.