Private ruling: GST and sale of property
Date of advice: 26 February 2021
Published: April 2021

Ruling: Q1: Did you, the liquidators of the Trustee of the Trust, have a GST liability pursuant to section 58-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 in respect of the sale of the Property? | A1: No

Relevant facts and circumstances: You as Liquidators were jointly and severally appointed liquidators for the winding up of a Company by order of the relevant court made ddmmyyyy. Mr X resigned on ddmmyyy and Mr Y remained as sole liquidator. You sent a notification of your appointment on the ATO form called the 'Appointment or Cessation of a Representative of an Incapacitated Entity' (the ATO Form). On ddmmyyy the Company was issued a Notice pursuant to the relevant legislation (the Notice) from the local Council for unpaid rates and charges in relation to the Property it held as Trustee of the Trust. You have provided a copy of the Notice. Prior to your appointment as liquidators, the Council took possession of the Property, pursuant to the relevant legislation to recover outstanding council rates. The Council sold the Property at public auction on ddmmyyy for $X to Entity B and or nominee. You have provided a copy of the Contract of sale of Land (the Contract) for the Property. The particulars of sale provide that the sale price includes GST (if any). Settlement occurred on ddmmyyy with the nominee, as the Purchaser.

Relevant legislative provisions: A New Tax System (Goods and Services) Tax Act 1999 Division 58 | A New Tax System (Goods and Services) Tax Act 1999 section 195-1

Reasons for decision: Summary: In this reasoning: • unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) • all legislative terms of the GST Act marked with an asterisk are defined in section 195-1 of the GST Act • all reference materials, published by the Australian Taxation Office (ATO), that are referred to are available on the Australian Taxation Office (ATO) website ato.gov.au A representative of an incapacitated entity is liable under subsection 58-10(1) to pay any GST that the incapacitated entity would, but for this section, be liable to pay on a taxable supply. However, this is only to the extent that the making of the supply, to which the GST relates is within the scope of the representative's responsibility or authority for managing the incapacitated entity's affairs. A representative is defined in section 195-1 to include a liquidator and an incapacitated entity is defined in section 195-1 to include an entity that has a representative. In this case you, were appointed as Liquidators of the Company. This Company is the Trustee of the Trust. You are therefore a representative as a liquidator of the Company in its capacity as the Trustee of the Trust and the Trust is an incapacitated entity. You are liable for GST pursuant to section 58-10 for any GST on a supply which is within the scope of your authority for managing the affairs of the Trust. The relevant transaction you have asked us to consider was the sale of the Property. The Property was sold by the Council pursuant to the relevant legislation to recover outstanding council rates. Accordingly, the supply was not made by you and therefore not within the scope of your authority for managing the affairs of the Trust. Therefore, you are not liable for GST on this supply.