Private ruling: Property
Date of advice: 22 January 2016
Published: March 2016

Ruling: Q1: Is the sale of specified property a GST-free supply under section 38-480 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You bought rural land in around specified year. You carried on an enterprise of rearing and selling livestock on the land since then. This is your main enterprise and is still continuing. You sold the land. The sale settled in specified date. The purchaser intends to rear and sell livestock on the land acquired.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 38-480

Reasons for decision: Summary: In this ruling, please note: • All legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) unless otherwise specified. • All terms marked by an *asterisk are defined terms in the GST Act. Section 38-480 provides that the supply of a freehold interest in land is GST-free if: • the land is land on which a farming business has been carried on for at least the period of 5 years preceding the supply; and • the recipient of the supply intends that a farming business be carried on, on the land. A 'farming business' is defined to include maintaining animals for the purpose of selling them or their bodily produce (including natural increase). The land is land on which a farming business has been carried on for at least the period of 5 years preceding the supply. In addition, the purchaser intends to maintain animals for the purpose of selling them or their bodily produce (including natural increase). As a result, all of the requirements of section 38-480 have been met. Therefore, you are making a GST-free supply under section 38-480 when you sell your freehold interest, in farmland.