Private ruling: Sale of Rent-Roll
Date of advice: 27 August 2025
Published: 27 October 2025
Ruling period: 1 July 20XX to 31 December 20XX
Date scheme commenced: XX XX 20XX

Ruling: Q1: Was the sale of your Rent Roll a taxable supply for the purposes of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 ( GST Act)? | A1: Yes, the sale of your Rent Roll was a taxable supply.

Relevant facts and circumstances: XX Pty Ltd was for many years a real estate and property management agency. Its principal is YY. After selling its rent roll and terminating the lease on its commercial premises in 20XX, the company now operates from the home of YY and derives its income from sales commissions and advertising. The sale of its rent roll was pursuant to a contract termed "Sale of Rent-Roll Deed" (the Deed) signed on XXXX. The parties to the Deed were: a) XX as Vendor; b) YY as Covenantor; c) WW Pty Ltd as Purchaser; and d) VV as Guarantor. Clause 2(b)(ii) of the Deed stipulates that, prior to Completion, the Vendor shall provide the Purchaser with the written calculation of the Purchase Price. Clause 7 of the Deed makes several statements about goods and services tax (GST), including, relevantly: 1. "Amounts specified as payable under or in connection with this Deed are expressed exclusive of GST." 2. "As GST is payable for the supply made under or in connection with this Deed, the Purchaser must, at the time a payment for the supply is due, pay to the Vendor the GST payable for the amount due." 3. "The recovery by the supplier of any amount in respect of GST under this Deed on a supply is subject to the issuing of the relevant tax invoice or adjustment note to the recipient." The Deed contains no clauses constituting an agreement between the Purchaser and the Vendor that the sale was a supply of a going concern. You advised us that there was no separate written agreement to the same effect. In accordance with Clause 7, you sent a Tax Invoice to the Purchaser dated XXXX purporting to show an amount of GST due from the Purchaser. You advised us that the Purchaser has refused to pay the invoice. In that respect, we have sighted an email sent to you from your broker on XXXX which contained a statement to the effect that the Purchaser was "steadfast" in his position that the sale of the Rent Roll was a supply of a going concern and that, therefore, GST was "not applicable" and "would not be paid".

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 9-25 | A New Tax System (Goods and Services Tax) Act 1999 - section 9-30 | 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 38-325 | A New Tax System (Goods and Services Tax) Act 1999 - section 195-1

Reasons for decision: Summary: References to 'you' are to XX Pty Ltd. References to 'the GST Act' are to the A New Tax System (Goods and Services Tax) Act 1999 . Pursuant to the GST Act, you have a liability to GST in respect of the sale of the Rent Roll if the supply was a taxable supply. You make a taxable supply if you make a supply: a) for consideration; b) in the course or furtherance of an enterprise you carry on; c) that is connected to Australia; and d) you are registered or required to be registered for GST (section 9-5). However, you do not make a taxable supply to the extent the supply is GST-free or input taxed (also section 9-5). Each of the above factors necessary for a taxable supply are discussed in turn below. | Detailed Reasoning - Did you make a supply for consideration?: The sale of the Rent Roll was a supply for the purposes of the GST Act. Pursuant to the Deed, the sale was for consideration. Therefore, you made a supply for consideration for the purposes of the GST Act. | Detailed Reasoning - Was the supply made in the course or furtherance of an enterprise you carry on?: The GST Act states that carrying on an enterprise includes doing anything in the course of the commencement or termination of the enterprise (section 195-1). Whilst you did not supply the Rent Roll in the course of entirely terminating your enterprise, it is our view that making supplies when 'downsizing' an enterprise meets the requirement that you are making supplies in the course or furtherance of that enterprise. | Detailed Reasoning - Was the supply connected to Australia?: This requirement for a taxable supply is satisfied as the supply was done in Australia and was made through an enterprise that you carry on in Australia (paragraphs 9-25(5)(a) and (b) of the GST Act). | Detailed Reasoning - Was the supply input taxed or GST-free to any extent?: There are no provisions of the GST Act that would have treated the supply of your Rent Roll as input taxed. There is only one provision of the GST Act which could have treated the supply of the Rent Roll as GST-free, and thus falling outside the terms of a taxable supply. That provision is section 38-325, which treats the supply of a going concern as a GST-free supply provided certain conditions are met. One of the conditions required under section 38-325 for a supply to be treated as a GST-free supply of a going concern is that the supplier (you) and the recipient (WW Pty Ltd) must agree in writing that the supply is of a going concern. That written agreement must be made at or before the time of the supply. As the Deed contains no such agreement and you have advised that no separate written agreement was made with WW Pty Ltd, section 38-325 did not apply to the sale. As one of the conditions for GST-free treatment under section 38-325 was not met, the supply of the Rent Roll to WW Pty Ltd was not a supply of a going concern and, therefore, was not a GST-free supply to any extent. Given all the other requirements for a taxable supply to have been made were met by the supply of the Rent Roll, you have a liability to GST.