Private ruling: GST and going concern - leasing enterprise
Published: January 2015

Ruling: Q1: Will your supply of the property located in Australia 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 ? | A1: Yes. Your supply of the property will be a GST-free supply of a going concern. This is because, on settlement date, you will be providing the purchaser all of the things that are necessary for the continued operation of a leasing enterprise, being the property and the lease agreement. In addition, you will continue to carry on the leasing enterprise until the day of the supply. Finally, there is a clause in the sale contract indicating that you and the purchaser have agreed in writing that the sale is a supply of a going concern, the sale will be for consideration and the purchaser is registered for GST.

Relevant facts and circumstances: You, are registered for GST. You are part of a GST group of which Entity A is the group representative. You acquired a commercial property located in Australia (the property) as a taxable supply on ddmmyyyy. You entered into a lease of the property to Entity A on mmyyyy with a commencement date of mmyyyy. You supplied a copy of the lease agreement between you and Entity A with a X year lease. You entered into a contract to sell the property on the mmyyyy and supplied a copy of the contract. The contract sets out that the: • property is to be sold subject to the lease to Entity A • parties agree that the sale of the property is to be a GST-free supply of a going concern, and • the vendor will carry on the enterprise until completion date. The purchaser Entity B is registered for GST. The contract sets out that the sale price is $X and the settlement date is mmyyyy

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-325