Private ruling: GST and a going concern
Published: December 2014

Ruling: Q1: Was the sale of the commercial property (Property) by you a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the sale of the Property was a GST-free supply of a going concern as all the conditions in section 38-325 of the GST Act were met.

Relevant facts and circumstances: • You are registered for goods and services tax (GST). • You entered into a contract of sale, for the sale of the Property for consideration. • You carried on a leasing enterprise in respect of the Property. • The Property has a car park in the basement and the ground floor and first floor are both commercial offices and is fully leased to various tenants. • The ground floor is leased to various tenants. • The first floor is leased to separate individuals. These individuals are not themselves the owners of the Property. • Settlement was completed. You have supplied to the ATO a copy of the settlement statement. • The contract of sale states that 'You and the Purchaser agree that the sale of the Property will be a GST-free supply of a going concern'. • It was also agreed that the leases is in place at the time of settlement will be assigned to the purchaser at that time. • The purchaser has advised you that they are registered for GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 (GST Act) Section 38-325.

Reasons for decision: Summary: Based on the information you provided, under section 38-325 of the GST Act your 'supply of the Property as a going concern' will be GST-free because, on settlement date, you: • supplied all of the things that are necessary for the continued operation of the leasing enterprise, including the building and leases, • to a purchaser who is registered for GST, for agreed consideration, • under a contract that confirms your mutual written agreement the sale is a supply of a going concern and • you carried on the leasing enterprise until the day of the supply (settlement date). Note: If the details of your arrangement are not correct or have changed all of the requirements of section 38-325 of the GST Act may no longer be satisfied. The sale of the Property would then not be a GST-free supply of a going concern, and would become a taxable supply subject to GST.