Private ruling: Goods and services tax - Insolvency - Incapacitated entities
Published: November 2014

Ruling: Q1: Are you taken to have made a supply pursuant to section 58-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) where you supply the property of another entity in your capacity as receiver? | A1: No. Section 58-5 of the GST Act provides that any supply by an entity in their capacity as a representative of another entity (an incapacitated entity (IE)), is taken to be a supply by the IE. | Q2: Are you liable for GST in your capacity as receiver on the sale of a particular property? | A2: No. Section 58-10 of the GST Act provides that a representative of an IE is liable to pay the GST that the IE would have been liable to pay on a taxable supply, to the extent the supply is within the scope of the representative's responsibility or authority for managing the IE's affairs. Given the information provided, the IE is not required to be registered for GST. Therefore the supply of the property would not meet the definition of a taxable supply under section 9-5 of the GST Act.

Relevant facts and circumstances: On a specified date you were appointed as receiver and manager in relation to land located at a specific address (the Land). The Land is a freehold interest subject to a registered mortgage in favour of an identified financial institution. N is the registered owner of the Land in their own capacity and not as trustee of a trust. The land is approximately Xm 2 containing a detached house and related residential improvements. Approximately X% of the Land was used for the cultivation of herbs for sale. N is not currently registered for GST. . N's Australian Business Number was cancelled after your appointment as receiver and manager. N is the sole director, secretary and shareholder of ABC Pty Ltd (ABC). You took possession of the Land on a specified date. The Land is currently unoccupied however prior to your appointment you believe the Land was N's main residence. During your appointment as receiver and manager you entered into a contract for sale in respect of the Land.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Division 58 | Section 9-5 | Section 195-1