Private ruling: Statutory trustee and the sale of property
Date of advice: 8 September 2025
Published: 10 November 2025
Date scheme commenced: DD/MM/YYYY

Ruling: Q1: DidThe Trustee for a Statutory Trust (you) in your capacity as statutory trustee, make a taxable supply pursuant to section 9-5 of the A New Tax System Goods and Services Tax Act 1999 (GST Act) of a specified address (the Property)? | A1: Yes. | Q2: If your supply of the Property is a taxable supply pursuant to section 9-5, is GST 10% of the value of the taxable supply? | A2: Yes. Issue 2 Income tax | Q3: Are the sale proceeds from the sale of the Property assessable to the Trustee under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) as a result of an isolated transaction carried out for profit and commercial in character? | A3: No. | Q4: Does the Trustee have a capital gain on the sale of the Property under section 100-45 of the ITAA 1997? | A4: No. | Q5: Does the Trustee have an income tax liability arising from the sale of the Property under sections 98, 99 or 99A of the Income Tax Assessment Act 1936 (ITAA 1936)? | A5: No. This private ruling applies for the following period: DD/MM/YYYY - DD/MM/YYYY The scheme commenced on: DD/MM/YYYY

Relevant facts and circumstances: In this ruling, unless otherwise stated, the expressions 'you/your' and 'the Trustee/Trustees' refer to you and are used interchangeably throughout this ruling. The Trustee for a Statutory Trust (you) are registered for GST from a specified date. The Property is approximately xx hectares in size. The Property is zoned Rural. A residential premises and other buildings are situated on the Property. The residential premises and other buildings on the Property sit within a fenced area of approximately xx square metres. Prior to the date of the Court Order, the Property was owned by two named parties as joint tenants. On a specified date the Supreme Court made an order that pursuant to section 66G of the Conveyancing Act 1919 (NSW), a named party (Trustee) be appointed trustee for the sale of the Property. A copy of the Court Order was provided as part of this ruling request. There was no enterprise carried on at the Property by the owners prior to the appointment of the Trustee. At the time of the Court Order, you did not pay anything to acquire the Property, nor did you give any other property. The Property did not generate any income during the period it was held by you, with the exception of the sales proceeds. You undertook the following duties in your role as trustee: • obtained quotes from independent valuers and independent real estate agents for an estimate of their costs for their services • engaged a valuer and a real estate agent • maintained the certificate of currency for insurance • obtained advice from the professional services: o Legal advice o Accounting services o Conveyancing services o Real estate agent. • engaged removalists to prepare the Property for sale • sought judicial advice as the parties to settlement agreement had opposing views on the agreement • Provided updates to the legal representatives of the beneficiaries in the estate. Sale of the Property You, through your Trustee, subsequently entered into a contract for the sale (Sale Contract) of the Property with a named party (purchaser) for the sale of the Property for a specified amount (excluding of GST). The Sale Contract provides that the supply is a taxable supply. Settlement was completed on a specified date.

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 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 section 9-70 | A New Tax System (Goods and Services Tax) Act 1999 section 9-75 | A New Tax System (Goods and Services Tax) Act 1999 section 9-75 | A New Tax System (Goods and Services Tax) Act 1999 sub-section 9-80(1) | A New Tax System (Goods and Services Tax) Act 1999 section 40-65 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1 | Income Tax Assessment Act 1936 section 98 | Income Tax Assessment Act 1936 section 99 | Income Tax Assessment Act 1936 section 99A | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 100-45 | Income Tax Assessment Act 1997 section 110-25 | Income Tax Assessment Act 1997 section 116-20 | Income Tax Assessment Act 1997 section 116-20

Reasons for decision: Detailed Reasoning - Question 1: DidThe Trustee for a Statutory Trust (you) in your capacity as statutory trustee, make a taxable supply pursuant to section 9-5 of the A New Tax System Goods and Services Tax Act 1999 (GST act) of a specified address (the Property)? | Summary: You made a taxable supply of the Property under section 9-5 of the GST Act. | Detailed Reasoning - Detailed reasoning: You make a taxable supply if you meet the requirements of section 9-5 of the GST Act, which states: Section 9-5 provides you make a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected with the indirect tax zone; and (d) you are registered, or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. In this case the supply of the Property by the Trustee satisfies the requirements of subsections 9-5(a), 9-5(c) and 9-5(d) of the GST Act. Further the supply of the Property is not a GST-free supply. The term 'enterprise' is defined in section 9-20 of the GST Act and includes an activity, or series of activities, done in the form of a business or in the form of an adventure or concern in the nature of trade... The phrase 'carrying on an enterprise' includes doing anything in the course of the commencement or termination of the enterprise (section 195-1). Miscellaneous Taxation Ruling MT 2006/1: The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number (MT 2006/1) considers the meaning of the terms 'entity' and 'enterprise' for the purposes of the GST Act. Paragraphs 159 and 234 of MT 2006/1 state: 159. Whether or not an activity, or series of activities, amounts to an enterprise is a question of fact and degree having regard to all of the circumstances of the case. 234. Ordinarily, the term 'business' would encompass trade engaged in, on a regular or continuous basis. However, an adventure or concern in the nature of trade may be an isolated or one-off transaction that does not amount to a business but which has the characteristics of a business deal. For an entity to be carrying on an enterprise, it is necessary to identify one activity or a series of activities that amount to an enterprise. The concept of 'an adventure or concern in the nature of trade' has arisen in the context of Australian and United Kingdom revenue law and is not defined for the purposes of the GST Act. Trade commonly means operations of a commercial character where goods or services are provided to customers for reward. An adventure or concern in the nature of trade includes a commercial activity that does not amount to a business. Isolated transactions fall into this category. Paragraphs 262 to 269 of MT 2006/1 discuss isolated transactions and sales of real property. In particular paragraph 266 states: 266. In determining whether activities relating to isolated transactions are an enterprise or are the mere realisation of a capital asset, it is necessary to examine the facts and circumstances of each particular case. This may require a consideration of the factors outlined above, however there may also be other relevant factors that need to be weighed up as part of the process of reaching an overall conclusion. No single factor will be determinative rather it will be a combination of factors that will lead to a conclusion as to the character of the activities. The issue of whether a party, or parties, appointed pursuant to section 66G of the Conveyancing Act 1919 (NSW)as statutory trustees for the sale of property are carrying on an enterprise was considered by White J in Toyama Pty Ltd v Landmark Building Developments Pty Ltd [2006] NSWSC 83 ( Toyama ). In Toyama , White J at [68] noted that the 'enterprise which the trustees carried on was the series of activities required to be undertaken pursuant to their appointment as trustees for sale. The sale of the Property, being the very thing they were appointed to do, was in furtherance of that enterprise'. White J at [69] added that 'the activity, or series of activities, which they carried on, was done in the form of business. The words "in the form of" have the effect of extending the meaning of enterprise beyond entities carrying on a business, to encompass activities that have the appearance or characteristics of business activities'. White J at [72] stated: 72. When the enterprise carried on by the trustees is regarded as a whole, it can be seen that it involves a series of acts done by the trustees. These included the engaging of consultants, the marketing of the property, the obtaining of judicial advice and the sale of the property. In this case, the Trustee held the Property for sale as prescribed by section 66G of the Conveyancing Act 1999 (NSW). Consistent with the view in MT 2006/1 and the comments in White J in Toyama we consider that in conducting their duties and obligations pursuant to the Court Order, the Trustee was carrying on an enterprise for GST purposes. The series of activities undertaken by the Trustee as listed above, were commercial in character and were carried out 'in the form' of a business by the Trustee for GST purposes. It follows that the sale of the Property was also made in the course or furtherance of this enterprise as it is the reason for which the Trustee are appointed. Therefore, what remains to be determined is whether the sale of the Property is input taxed. A sale of residential premises may be input taxed under section 40-65 of the GST Act, which states: 1) A sale of *real property is input taxed , but only to the extent that the property is *residential premises to be used predominantly for residential accommodation (regardless of the term of occupation). 2) However, the sale is not input taxed to the extent that the *residential premises are: a) *commercial residential premises; or b) *new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998. The terms 'commercial residential premises' and 'new residential premises' are also defined in section 195-1 of the GST Act. When defining new residential premises, section 195-1 of the GST Act defines the term by reference to the meaning given for the term in section 40-75 of the GST Act. In this case the Property does not meet the definition of new residential premises or commercial residential premises under the GST Act. Goods and Services Tax Ruling GSTR 2012/5: Goods and services tax: residential premises (GSTR 2012/5) states at paragraph 6: 6. Premises, comprising land or a building, are residential premises under paragraph (a) of the definition of residential premises in section 195-1 where the premises are occupied as a residence or for residential accommodation, regardless of the term of occupation. The actual use of the premises as a residence or for residential accommodation is relevant to satisfying this limb of the definition. Further paragraph 46, 47, 91 and 92 of GSTR 2012/5 discusses land supplied with a building and/or vacant land and state: | Detailed Reasoning - Land supplied with a building: 46. There is no specific restriction, in the definition of residential premises, on the area of land that can be included with a building. The extent to which land forms part of residential premises to be used predominantly for residential accommodation is a question of fact and degree in each case. A relevant factor in determining this is the extent to which the physical characteristics of the land and building as a whole indicate that the land is to be enjoyed in conjunction with the residential building. The use of the land is not a determining factor in deciding if the land forms part of the residential premises. | Detailed Reasoning - Vacant land: 47. Vacant land is not capable of being occupied as a residence or for residential accommodation as it does not provide shelter and basic living facilities. Vacant land is not residential premises. | Detailed Reasoning - Land supplied with a building: 91. The GST Act does not restrict the area of land that can be included in residential premises. The extent to which land forms part of residential premises to be used predominantly for residential accommodation is a question of fact and degree in each case. A relevant factor in determining this is the extent to which the physical characteristics of the land and building as a whole indicate that the land is enjoyed in conjunction with the residential building. Just because land is used privately does not mean that the land necessarily has the physical characteristics to indicate that the land is to be enjoyed in conjunction with the residential building. | Detailed Reasoning - Vacant land: 92. Vacant land cannot be residential premises. In Vidler v. Federal Commissioner of Taxation , Sundberg, Bennett and Nicholas JJ stated that 'vacant land is not land that is capable of being occupied as a residence or for residential accommodation'. This is because vacant land, of itself, does not provide shelter and basic living facilities, and cannot, therefore, be occupied as a residence or for residential accommodation. Being in a rural setting, the various buildings and fenced land immediately surrounding the residential premises contribute to its enjoyment and therefore form part of the residential premises. The residential premises, buildings and the fenced surrounds will meet the requirements of being input taxed. We therefore consider that the supply of the Property is only partly a supply of residential premises (input taxed) and the remaining part (vacant land) is not considered input taxed. On this basis, to the extent that the Property is not an input taxed supply, the requirements for making a taxable supply will be satisfied. Section 9-40 provides that an entity is liable for GST on all taxable supplies that it makes. However, where an entity is making a mixed supply that is a combination of separately identifiable taxable and non-taxable parts the GST liability is only calculated on the taxable part of the supply. In respect to a mixed supply, the consideration received for the supply must be apportioned and the consideration relating to the taxable portion of the supply is a taxable supply pursuant to section 9-5. | Detailed Reasoning - Question 2: If your supply of the Property is a taxable supply pursuant to section 9-5, is GST 10% of the value of the taxable supply? | Summary: As your supply was taxable pursuant to section 9-5 of the GST Act, GST is 10% of the value of the taxable supply of the Property. | Detailed Reasoning - Detailed reasoning: Section 9-70 of the GST Act provides that the amount of GST on a taxable supply is 10% of the value of the taxable supply. The value of the taxable part of a supply that does not have GST-free or input taxed parts is determined under section 9-75. The value of the taxable part of the supply is 10/11 of the consideration for the taxable part, and the GST payable is equivalent to 1/11 of that consideration. In the case of a mixed supply that has non-taxable parts that are GST-free or input taxed, the value of the taxable part is calculated in accordance with section 9-80. Section 9-80 requires an apportionment. It is necessary to determine the proportion of the value of the actual supply that the taxable part represents. Subsection 9-80(1) defines the value of the taxable part of the supply upon which GST is payable. The value of the taxable part is defined as the proportion of the value of the actual supply that the taxable supply represents. Goods and Services Tax Ruling GSTR 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts (GSTR 2001/8) provides guidelines on how to apportion consideration that includes taxable and non-taxable parts and provides methods and examples that may be used to apportion the consideration for a mixed supply. Paragraphs 26 and 27 of GSTR 2001/8 provide that any reasonable method can be used to apportion the consideration for a mixed supply. Depending on the facts and circumstances of the supply, a direct or indirect method may be an appropriate basis upon which to apportion the consideration and ascertain the value of the taxable part of the supply. Furthermore, the method used must be supportable in the particular circumstances and you should keep records that explain the method and the basis used to apportion the consideration between the taxable and non-taxable parts of a supply. Paragraphs 92 to 113 of GSTR 2001/8 provides guidance on what is a fair and reasonable measure of the value of the taxable part of the supply in different factual situations. In this case you will need to reasonably apportion the consideration for your supply of the Property and retain records that explains the basis used to apportion the consideration between the taxable and non-table portions of the sale of the Property. Once you have established the value of the taxable part of the supply, you can simply calculate the GST payable as either: • 10% of the GST-exclusive value of the taxable part; or • 1/11 of the GST inclusive value for the taxable part. | Summary: Proceeds from the sale of the Property are not assessable to the Trustee as ordinary income under section 6-5 of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: Section 6-5 of the ITAA 1997 provides that your assessable income includes income according to ordinary concepts. The Commissioner's view on whether a profit from an isolated transaction is income according to ordinary concepts is discussed in Taxation Ruling TR 92/3 Income tax: whether profits on isolated transactions are income. Paragraph 6 of TR 92/3 provides that a profit from an isolated transaction is generally income when both of the following elements are present: • the intention or purpose of the taxpayer in entering into the transaction was to make a profit or gain; and • the transaction was entered into, and the profit was made, in the course of carrying on a business or in carrying out a business operation or commercial transaction. Paragraph 13 of TR 92/3 highlights various factors in considering whether a business operation or commercial transaction exists. The relevant factors include: a) the nature of the entity undertaking the operation or transaction, b) the nature and scale of other activities undertaken, c) the amount of money involved in the operation or transaction and the magnitude of the profit sought or obtained, d) the nature, scale and complexity of the operation or transaction, e) the manner in which the operation or transaction was entered into or carried out, f) the nature of any connection between the relevant taxpayer and any other party to the operation or transaction, g) if the transaction involved the acquisition and disposal of property, the nature of that property, and h) the timing of the transaction or the various steps in the transaction. The Trustee was appointed by the Court to sell the Property and distribute the net proceeds to beneficiaries. It is considered that the Trustee's activities in carrying out the Court order do not have the indicia of a business operation or commercial transaction as discussed at paragraph 13 of Taxation Ruling TR 92/3; nor is there the requisite intention of the Trustee to make a profit or gain. Therefore, the proceeds from the sale of the Property are not considered ordinary income of the Trustee under section 6-5 of the ITAA 1997. | Detailed Reasoning - Question 2: Does the Trustee have a capital gain on the sale of the Property under section 100-45 of the ITAA 1997? | Summary: The total proceeds from the sale of the Property will not exceed the Trustee's cost base for the Property, therefore the Trustee does not make a capital gain from CGT event A1. | Detailed Reasoning - Detailed reasoning: CGT event A1 happened when the Trustee entered into a contract to dispose of the Property (section 104-10 of the ITAA 1997). A capital gain will therefore be made by the Trustee in the income year ending 30 June 20XX, if the capital proceeds from the CGT event are more than the asset's cost base (section 100-45 of the ITAA 1997). Pursuant to subsection 116-20(1) of the ITAA 1997, the capital proceeds for the CGT event are the total of the money the Trustee received (or is entitled to receive) in respect of the event happening and the market value of any other property the Trustee received (or is entitled to receive) in respect of the event happening. The GST payable on the sale of the Property is not included in the capital proceeds (subsection 116-20(5) of the ITAA 1997). Under subsection 110-25(2) of the ITAA 1997, the first element of the cost base of the Property is the money paid by the Trustee (or required to be paid) and the market value of any other property given (or required to be given) by the Trustee in respect of acquiring the Property. It is accepted that the Trustee's obligation under the Court Order to pay the net proceeds to the beneficiaries will also be their cost of acquisition for the purposes of the first element of the cost base under subsection 110-25(2) of the ITAA 1997. This net proceed amount is considered the money the Trustee is required to pay for the acquisition of the Property. The second element of the cost base is the incidental costs incurred in respect to the Property (subsection 110-25(3) of the ITAA 1997). Incidental costs that can be included in the cost base of a CGT asset are set out in section 110-35 of the ITAA 1997. It includes items such as agent fees, settlement costs, sales advertising/marketing costs, legal costs, valuation costs and transfer costs. The third element of the cost base includes the costs of owning the Property including maintenance costs, insurance, rates and land tax (subsection 110-25(4) of the ITAA 1997). It is accepted that all costs incurred in holding and selling the Property including the Trustee's remuneration will form part of the second and third elements of the cost base of the Property. The Trustee's total cost base for the Property in this case, being the first element (net proceeds) and the second and third elements (holding and selling costs), will equal the capital proceeds from the sale of the Property. Accordingly, the Trustee will not make a capital gain under section 100-45 of the ITAA 1997 from the sale of the Property as the capital proceeds from the CGT event will not exceed the Property's cost base. | Detailed Reasoning - Question 3: Does the Trustee have an income tax liability arising from the sale of the Property under sections 98, 99 or 99A of the Income Tax Assessment Act 1936 (ITAA 1936)? | Summary: As there is no net income arising from the sale of the Property by the Statutory Trust, sections 99, 99 and 99A of the ITAA 1936 do not apply and the Trustee will not have an income tax liability. | Detailed Reasoning - Detailed reasoning: The liability to taxation provisions in Division 6 of Part III of the ITAA 1936, specifically sections 98, 99 and 99A only apply where there is net income of the trust estate. The Property sale in this case does not give rise to a capital gain for the Trustee. The Trustee also does not derive any income from holding the Property during the relevant period. The Trustee therefore does not derive any net income for the statutory trust. As there is no net income of the statutory trust sections 98, 99 and 99A of the ITAA 1936 do not apply.

Reasons for decision: These reasons for decision accompany the Notice of private ruling | This is to explain how we reached our decision. This is not part of the private ruling.