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GST S 58: Specified agents of incapacitated persons, and mortgages in possession

A section of GST S 58 of the GSTA covers 2 areas:

  • Specified agents of incapacitated persons
  • Mortgagees in possession of land or other property of a mortgagor

In both these areas, S 58 applies to treat the specified agent as the registered person in respect of the taxable activity of the incapacitated person. IRD has released interpretation statement 23/03.

What is an incapacitated person?

An incapacitated person is a registered person who dies or goes into liquidation, receivership, voluntary administration or becomes bankrupt.

The IS states that where a registered person dies or is in liquidation, receivership, or voluntary administration, then their personal representative, liquidator, receiver, or administrator will be a specified agent of an incapacitated person and liable to fulfil the GST obligations related to the taxable activity in question. An exception exists for where the Official Assignee has used its power to carry on the bankrupt’s business.

For a mortgagee in possession of land or property of a registered person mortgagor, the Commissioner may deem the mortgagee to be a registered person where and to the extent that the mortgagee carries on any taxable activity of the mortgagor. Specified agents are automatically treated as registered persons in respect of an incapacitated person’s taxable activity however the Commissioner has discretion to do the same in respect of a mortgagee in possession.

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