GST and the sale of new property

From 1 July 2018, purchasers of new residential premises or potential residential land are required to withhold an amount of the contract price and pay this directly to the ATO as part of the settlement process. The amount of GST will not change.  However, care will need to be taken that this is declared properly on each contract.  The REIQ is amending its contract.

This does not affect the sales of existing residential properties or the sales of new or existing commercial properties.

For property transactions, purchasers will need to:

  • split the amount of GST from the total purchase price
  • pay the GST component directly to us by a disbursement at settlement
  • pay the GST exclusive purchase price to the property developer (vendor).

Property developers will need to give written notification to the purchasers when they need to withhold. The liability for the GST remains with the property developer, and there are no changes to how property developers lodge their business activity statements. However, there are significant penalties for both the buyer and the seller for unpaid GST.

Please call us if you would like more information.

Why you need to register a trade mark.

Example of the need for a trademark

A business who trades under a name and logo but does not register that as a trade mark may be required to stop using that name and log if another registers it.

Trademarking not only protects your intellectual property but it prevents you from being sued for the use of a similar trade mark registered by another business.

What is a trade mark?

A trade mark is a:

name,             word,               phrase,              logo,              symbol or image;
sound,            scent,               3D shape,          colour,

or a combination of these packaging the public identity of your product or service; it is used to distinguish your goods or services from other traders.

Why should I register a trade mark?

Your business name, company name or domain name does not protect your business, company or domain name.

Without getting your own trade mark registered, another person or business could apply and be granted registration of your name at any time without you even knowing.  They could then ask you to stop trading under your current business name.

With a registered trade mark you will:

  • own your brand name, perhaps indefinitely.
  • have monopoly use of the trade mark in Australia, or the country it is registered in.
  • ensure no one can trade under the same or similar name for related goods and services.
  • provide ownership and protection for your domain names.
  • provide an asset which can be sold, inherited, transferred or licenced.
  • increase the value of your business.
  • stop others from using the trade mark.
  • avoid being sued for infringing the Trade Marks Act or ‘passing off’.

Passing off

The principle of ‘passing off’ is that no person is entitled to represent that his or her goods or services as those of another.

Another party’s use of your business name could confuse or deceive your customers into thinking the competitor is you or somehow connected to your business.  If that has the potential for damage to your business then you may have an action of ‘passing off’ against that other party.

However, it is also open for another party to make this claim against you.  Much will depend on the circumstances, for example, did the competitor’s business use a similar name before you began using that name.

Again, registration of a trademark is your best solution.

Our Recommendation

We recommend that you make application to trademark your business name.  The cost of trademarking is not as expensive as you might think.

Call us if wish to discuss trade marking. We can give you an obligation free quote.

This is why we all need a social media policy.

A Linfox Driver wrote on his Facebook (please excuse the language):

“I admire any creature that has the capacity to rip Nina and Assaf’s heads off, sh*% down their throats and then chew up and spit out their lifeless body”

He was referring to his Linfox managers.  He didn’t understand that his Facebook public settings were set at the highest levels – very public.   He was sacked but, the Fair Work Commission ordered that he be reinstated and reimbursed his lost wages.

Why? Because Linfox had no social media policy.  As the Fair Work Commissioner Roberts observed:

“…[i]n this current electronic age, [having no social media policy] is not sufficient… many large companies have published detailed social media policies and taken pains to acquaint their employees with those policies.  Linfox did not”

Do your business a favour – get a social media policy.

Are you liable for online comments?

Social media has the ability to distribute your online comments instantaneously to a vast audience. Recent examples of social media gaffs are resulting more and more in defamation. But these examples are defying the normal defamation cases. Because social media is so accessible, everyone is potentially liable for defamation, not just those exposed to the normal avenues of media and publication. Read more…

Transferring a business that is heavily reliant on social media is fraught with danger

The “Ice Bucket Challenge” for Lou Gehrig’s disease has gone viral.  The challenge has raised an estimated $100 million for the non-profit Association ALS.  Not only is this a financial success story but it has raised the disease from near obscurity: most people had not heard of Lou Gehrig’s disease until the challenge.

The “Ice Bucket Challenge” for Lou Gehrig’s disease has gone viral.  The challenge has raised an estimated $100 million for the non-profit Association ALS.  Not only is this a financial success story but it has raised the disease from near obscurity: most people had not heard of Lou Gehrig’s disease until the challenge.

The challenge is the latest in a number of successful campaigns that highlight the power of social media.

Some businesses, from start-ups to large and well established businesses have become reliant on social media as a source of business. So buying a business with important or even critical social media assets requires careful planning.

The Social Media Providers hold almost all of the cards, and any attempt to purchase those “assets” by way of a simple asset purchase agreement will often be ineffective. While there are ways to (at least temporarily[1]) transfer control of social media accounts between entities, the legal and practical problems which arise cannot be ignored. Accordingly, great care needs to be taken when structuring transactions which include the transfer of ownership or control of social media accounts. For example, Facebook’s terms of service may present problems for your business. Those terms state:

  • “You will not transfer your account (including any Page or application you administer) to anyone without first getting our written permission.”
  • “You will not share your password (or in the case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account.”
  • “You will not transfer any of your rights or obligations under this Statement to anyone else without our consent.”

Some social media providers (such as Youtube) simply don’t allow you to transfer the social media asset at all. Even if the social media provider agrees to transfer the account it can be on ridiculous terms.

 This means, if the seller simply transfers the passwords to the buyer of a business with social media assets, the seller will be in breach of the conditions and the social media account could be shut down.  This might happen in particular if the relationship between the seller and the buyer sours and the seller informs the social media provider of the unauthorised transfer.

There are various other alternatives but each are as unattractive as the other.[2]  Put simply, in many cases it is simply not currently legally possible to transfer the social media asset.   The only alternative might be a long term joint campaign by the seller and the buyer but few parties will be interested in such a lengthy campaign unless the seller carefully creates a succession plan.

[1] The seller can simply provide the buyer will access codes.

[2] Option 1 – purchase the shares in the seller company, rather than its assets

Option 2 – Require the seller to provide permanent and exclusive access to all social media accounts

Option 3 – Appoint the seller as agent to operate the social media accounts in perpetuity

Option 4 – Require the seller to deactivate its social media accounts and agree not to open any new account under certain names, then establish new accounts with the same names

What happens to your digital life when you die?

It is estimated that we each have up to 25 online accounts: email accounts, social media, online banking and ecommerce sites such as PayPal.  Each account has a different value to us and our family.  Some have an obvious financial value and other have sentimental value. So, what happens to those accounts when you die?

The answer depends on the terms of use for each online account, what the digital content is, the jurisdiction of the provider and what (if any) laws may apply.

Terms and conditions

The terms of each individual account is important. For example, Yahoo! US says your family has no rights to the e-mail accounts after you die. Yahoo! UK is not so strict.  AOL and Hotmail allow the transfer of e-mail accounts to next of kin. Twitter will deactivate an account on death.

Facebook has two options. Either turn the site into a memorial where the account is locked, but other users can post comments, photos, or, remove the account.

Google allows us to decide the fate of our accounts when we die. If we don’t make a selection, Google warns us our family may only access our email account ‘in rare cases.’


Typically, the law lags behind the reality. Some US states have now legislated to allow our families access to our digital accounts after we die. But no such specific legislation currently exists in Australia.

Existing Australian laws might be regarded as conflicting.  Privacy laws may prevent our families from gaining access but our estate may have copyright in the content of our on-lines lives. These laws must be set against the terms of the use that we agreed to. But perhaps more importantly, those terms may say Australian laws do not apply. What then?

What to do?

Clearly we can’t have a separate arrangements for each account.  Most of us can barely keep an up-to-date Will let alone make arrangements for some 25 or more accounts, each with different laws,  requirements and arrangements.

If your digital assets are important to you, there are some simple things you can do:

  • Include an appropriate clause in your Will.   That is the first and most important step.
  • Select the most important accounts and single them out for special attention, where necessary.
  • Leave a list of your account and passwords with someone you trust – even though most online terms state that you must not give your password to another person.

This area is fraught with difficulty.  However, if you value your online assets it is better to do something rather than nothing.

Remember, making a Will is made easy with the right help and should be the first step.

For more information call Matthew Yates. 07 5479 2457

Disclaimer: This is not legal advice and cannot be relied upon as legal advice.

iWill – iPhone Will is declared valid

A recent Qld Supreme Court decision heralds the iWill.  A Will written on an iPhone has been declared valid and probate was granted to the executor named in the Will.  This is despite the iWill not being witnessed or physically signed by the deceased.

Lyons J held that the iWill was valid because it was a ‘document’ that set out the deceased testamentary intentions.  Further there was evidence the deceased intended the document to ‘form his Will’.

The deceased declared this was his Will, identified himself and his address and appointed an executor before indicating how he wished to dispose of his property.  The deceased then left a number of farewell notes on his smart phone and took his own life.

The decision raises many questions:

  • What proof is there that the deceased was the one that wrote the Will when it was not signed or witnessed?
  • What would prevent another person from changing the Will?
  • What was the deceased’s state of mind before he took his own life and did he therefore  have ‘capacity’ to create a legal Will?

A will is a serious document. It is intended to last and pass the stringent test of probate. We suspect that this decision will be distinguished on very specific circumstances. Not every Tweet or Facebook message before death will be regarded as a Will. In short, don’t risk your last wishes on a smartphone.

For more information call Matthew Yates. 07 5479 2457

Disclaimer: This is not legal advice and cannot be relied upon as legal advice.