Private ruling: Goods and services tax (GST) and registration
Date of advice: 18 April 2017
Published: September 2017

Ruling: Q1: Are you required to be registered under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act)? | A1: No, you are not required to be registered under section 23-5 of the GST Act, because your GST turnover does not meet the registration turnover threshold.

Relevant facts and circumstances: ● You (specified names) own the property specified address. ● The property is owned by specified names as joint tenants owning 50% as tenants in common with specified name. ● Specified names acquired their share in the property on specified date. ● Specified name acquired their share in two stages: 25% on specified date, and 25% on the passing of their late spouse on specified date. ● The property consists of a specified number bedroom house situated on a specified number hectare block. ● The property historically was zoned for rural purposes, but has been rezoned by the specified entity as being for specified use. The rezoning provides the potential for future development for a range of residential uses. ● The property currently has associated income of specified number per annum relating to the lease of the house. Separately an agreement is in place with a group of farmers for use of the vacant land. The associated income from the farmers ranges between specified numbers per year. As such collectively the income received from the leasing enterprise can approach specified number per annum. ● The projected GST turnover from leasing the vacant land to the farmers is under specified number. ● There is a joint bank account in your names. The rent from the house and the income from the local farmers are deposited into this joint bank account. ● You individually receive no other income from this property nor from any other activities involving you collectively. ● None of you are individually nor jointly registered for GST. ● You are not, individually nor as a tax law partnership, carrying on an enterprise of property development in relation to the property. ● You are not, individually nor as a tax law partnership, carrying on any other activities that would constitute an enterprise. ● You have entered into a contract of sale for the property. The consideration is specified amount with a settlement date of specified date. ● The purchaser is a property developer. You will have no involvement in any development activities with the purchaser. ● The purchaser is not your associate.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 72-5 | A New Tax System (Goods and Services Tax) Act 1999 subsection 188-10(1) | A New Tax System (Goods and Services Tax) Act 1999 section 188-25