Patrick is a builder who is registered for GST. He recently built two new residential houses on a residential block of land. Patrick used a number of contractors to help him with the building works and they charged him GST on their invoices. The properties were completed eleven months after he purchased the land. Shortly after the building works were completed, Patrick sold one property to Sonia and kept the other as a residential rental property of his own. Sonia is planning on living on the property.

Required:

Prepare a professional letter of advice advising Patrick of the GST aspects during the building process, upon disposal to Sonia, and once he rented the second property. We recommend you review the textbook and ATO document QC 21960.

TIPS for Assignments:

This assignment should be written as a professional letter, therefore it should:

• be dated,
• have full address details,
• be marked as private and confidential,
• have a disclaimer,
• be signed off by a partner with contact details, and
• have an executive summary at the start.

This form of question requires students to present arguments on the application of the law to a given practical problem. In addressing a question that requires the application of the law, it is suggested that you adopt the following approach:

I: ISSUES - Identify the essential issues in the question

R: RULE - Identify the relevant law, i.e. relevant legislative provisions and cases A: APPLY - Apply the law to the problem

C: CONCLUSION form a reasoned conclusion on the application of the law