Private ruling: GST and sub-division of property
Date of advice: 24 November 2017
Published: April 2018

Ruling: Q1: Does the subdivision amount to an enterprise for GST purposes? | A1: No, the subdivision does not amount to an enterprise for GST purposes. An enterprise is defined in section 9-20 of the A New Tax System (Goods and Services Tax) Act 1999. An activity that is a private pursuit is not considered as an enterprise. We are of the view that even though the individual when they were alive and then later the Trustee of the Deceased Estate undertook subdivision activities of the property, these were done in the course of realising a private property. The subdivision activities were limited to only the minimal council requirements. Based on this, we are of the view that the subdivision activities by the individual when they were alive and later the Trustee of the Deceased Estate does not amount to an enterprise for GST purposes.

Relevant facts and circumstances: You are a Trustee of a Deceased estate. An individual (before passing away) was engaged in subdividing their private property as part of selling the property to obtain the maximise profits for the sale of the property. After the individual passed away, the Trustee of the Deceased estate continued the subdivision activities. The subdivision activities are limited to the minimal council requirements and there will be no buildings constructed as part of the subdivision.

Relevant legislative provisions: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 | Section 9-20 of the A New Tax System (Goods and Services Tax) Act 1999