Private ruling: GST - sale of a going concern
Date of advice: 14 November 2024
Published: 13 January 2025
Ruling period: DDMMYYYY to DDMMYYYY
Date scheme commenced: DDMMYYYY

Ruling: Q1: Will the supply of the Property situated at <address> be a GST-free supply of a going concern for the purposes of section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the supply of the Property by you to the Purchaser is a GST-free supply of a going concern under section 38-325 of the GST Act. This is provided the Purchaser is registered for GST at the time of the supply.

Relevant facts and circumstances: <Entity A> (you) is registered for GST effective from DDMMYYYY. You own a property situated at <address> (the Property). You entered into a Contract for sale and purchase of land (Sale Contract) with <Entity B> (the Purchaser) as trustee for <Entity C> on DDMMYYYY in relation to the Property. The particulars of the Sale Contract provide that the Property will be sold for <$amount>. The Property is expected to be settled on the later of either DDMMYYYY, or <number> business days after conditions under the Sale Contract are satisfied. On DDMMYYYY, Council (the Council) issued a Prevention Notice (the Notice) to you. The Notice mandates that you must undertake preventive measures addressing environmental concerns related to the Property. Clauses under the Notice instructs you with directions to take preventive actions and the expected time period to perform these preventive actions. Clauses under the Special Conditions of the Sale Contract outlines the purchaser's responsibilities and conditions that are needed to be satisfied for the completion of the sale of the Property. On DDMMYYYY, you signed a commercial lease agreement (the Lease Agreement) with <Entity D> (the Lessee) in respect of the Property. The Lessee is a related entity of the Purchaser. Schedule Items <number> to <number> in the Lease Agreement provides that the term of the lease is for <number> months, commenced on DDMMYYYY and terminates on DDMMYYYY, with no option to renew. Schedule Item <number> of the Lease Agreement provides that the rent payable under the lease is <$amount> per month, inclusive of GST. Schedule Item <number> in the Lease Agreement provides that the permitted use of the Property is for a construction site office, car parking, site sheds and materials storage for the preventive actions to be performed on the Property under the Notice. A clause under the Lease Agreement provides that where the completion of the Sale Contract occurs after the termination date, the lease will be extended to a date that is one month after the actual date of completion of the Sale Contract. A clause under the Lease Agreement outlines the Lessee's obligation in relation to the prevention works. The Purchaser is currently not registered for GST, but will be registered prior to completion of the sale.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-325 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1