By Jim Main -
Snapshot
- No matter what the pressure, always think carefully about GST
- A buyer has no obligation to top up for GST unless it is in the contract
- Until otherwise decided “market value” should be assumed to mean the GST-inclusive value
It’s 6pm and everyone is tired and emotional after a heated and acrimonious mediation between brothers Patrick and George.
They’re arguing over a price for George’s shares in the family company that owns the old family farm in which Patrick, your client, owns two-thirds of the shares and his brother, George, one-third.
Patrick has operated the farm in his own business. George has never been paid a dividend and is threatening to bring an application to wind up the company, alleging oppressive conduct.
To close the gap between them, you suggest to Patrick that he sell George a nearby block of land that Patrick owns but that George has always wanted.
You know they’ll haggle over the price so suggest they accept a valuation from Harry Jones, a valuer you know both Patrick and George have dealt with and respect.
Everyone agrees, the deal is done, and the mediation agreement signed. GST is not mentioned.
