Private ruling: GST and the supply of property
Date of advice: 23 September 2015
Published: September 2015

Ruling: Q1: Will the supply of the Property by Entity A be a GST-free supply of a going concern for the purpose of section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. This is because, on settlement date, Entity A will: • be providing Entity B (the purchaser) all of the things that are necessary for the continued operation of a leasing enterprise, being the premises and the continuing lease agreement • continue to carry on the leasing enterprise until the day of the supply • have a clause in the contract for sale indicating that Entity A and the purchaser have agreed in writing that the sale is a supply of a going concern and • receive consideration for the sale. In addition the purchaser is registered for GST.

Relevant facts and circumstances: Entity A owns a property and entered into a contract to sell the property to the purchaser. The contract was entered into on specified date. Settlement is expected to occur on specified date. The sale contract is subject to existing tenancies. The sale of the property is for consideration. The purchaser is registered for GST. The property is an office building. The property has been leased to Entity C. The fixed term tenancy period will expire on specified date. Entity A will supply its rights under the fixed term tenancy to the purchaser. Entity A will supply to the purchaser all of the things that are necessary for the continued operation of the leasing enterprise. Entity A and the purchaser have agreed in writing that the supply is of a going concern. Entity A will carry on the leasing enterprise until settlement.

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