Private ruling: GST-free going concern
Date of advice: 11 December 2025
Published: 2 February 2026
Ruling period: DD MMM YYYY to DD MMM YYYY
Date scheme commenced: DD MMM YYYY

Ruling: Q1: Will your supply of the Property situated at XX, together with the Related Items as specified in the Contract of Sale executed on DD MMM YYYY, constitute a GST-free supply of a going concern pursuant to section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes


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 38-250 | A New Tax System (Goods and Services Tax Act) 1999 section 195-1

Reasons for decision: Summary: In this ruling, • unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) • all legislative terms of the GST Act marked with an asterisk are defined in section 195-1 of the GST Act. • all reference materials, published by the Australian Taxation Office (ATO), that are referred to are available on the ATO website ato.gov.au A supply will be a GST-free supply of a going concern where all the requirements of section 38-325 are met. This section states: 1) The *supply of a going concern is GST-free if: (a) The supply is for *consideration; and (b) The *recipient is *registered or *required to be registered; and (c) The supplier and the recipient have agreed in writing that the supply is of a going concern. 2) A supply of a going concernis a supply under an arrangement under which: (a) The supplier supplies to the *recipient all of the things that are necessary for the continued operation of an *enterprise; and (b) The supplier carries on, or will carry on, the enterprise until the day of the supply (whether or not as a part of a larger enterprise carried on by the supplier). All these elements must be satisfied for the supply to be a GST-free supply of a going concern. Based on the facts supplied, the requirements of subsection 38-325(1) will be satisfied. That is, the supply of the Property and Related Items will be for consideration, the Purchaser is currently registered for GST and is expected to be registered or required to be registered for GST at the time of the supply (settlement date), and you and the Purchaser have agreed in writing that the supply is that of a going concern. Therefore, where the supply also meets the requirements of subsection 38-325(2) it will be a GST-free supply of a going concern. Goods and Services Tax Ruling GSTR 2002/5 Goods and services tax: when is a supply of a going concern GST-free? (GSTR 2002/5) explains what a 'supply of a going concern' is for the purposes of section 38-325. | Detailed Reasoning - Identified enterprise: Paragraph 19 of GSTR 2002/5 explains that the term 'supply under an arrangement' includes a supply under a single contract or supplies under multiple contracts which comprise a single arrangement. However, the things supplied under the arrangement must relate to the same enterprise, that is, the enterprise referred to in paragraphs 38-325(2)(a) and (b) (the 'identified enterprise'). Your supply of the Property and Related Items under the Contract of Sale, constitutes a supply under an arrangement. Paragraph 29 of GSTR 2002/5 notes that subsection 38-325(2) requires the identification of an enterprise that is being carried on by the supplier. This is the enterprise for which the supplier must supply all the things that are necessary for its continued operation. Also, the supplier must carry on this enterprise until the day of the supply, whether or not as part of a larger enterprise. Subsection 9-20(1) provides, amongst other things, that an enterprise is an activity, or series of activities, done: • In the form of a business (paragraph 9-20(1)(a)). • In the form of an adventure or concern in the nature of trade (paragraph 9-20(1)(b)). • on a regular or continuous basis, in the form of a lease, licence, or other grant of an interest in property (paragraph 9-20(1)(c)). As defined in section 195-1, 'carrying on' an enterprise includes doing anything in the course of the commencement or termination of an enterprise. Paragraphs 177 to 179 of 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) discuss the main indicators of carrying on a business, with reference to the principles in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? (TR 97/11): Indicators of a business 177. To determine whether an activity, or series of activities, amounts to a business, the activity needs to be considered against the indicators of a business established by case law. 178 R 97/11 discusses the main indicators of carrying on a business. Based on that discussion some indicators are: • a significant commercial activity; • a purpose and intention of the taxpayer to engage in commercial activity; • an intention to make a profit from the activity; • the activity is or will be profitable; • the recurrent or regular nature of the activity; • the activity is carried on in a similar manner to that of other businesses in the same or similar trade; • activity is systematic, organised and carried on in a businesslike manner and records are kept; • the activities are of a reasonable size and scale; • a business plan exists; • commercial sales of product; and • the entity has relevant knowledge or skill. 179. There is no single test to determine whether a business is being carried on. The character, activities and extent of an enterprise of property development or construction may vary widely depending on the composition of the respective enterprise and may involve one or more of the following: • land subdivision of small or large holdings; • subdivision and construction of premises in project stages; • subdivision, construction and marketing within the industry or direct to the public; • purchase and resale of land with development approvals; • the construction of houses only, the development of land or both; or • part of a larger enterprise. In your case, you were established as a vehicle for the purposes of the acquisition, development and subdivision of the property for re-sale at a profit. You intend to develop and subdivide the Property into residential lots, construct dwellings, a local park, district park, a bridge and the on-sale of the subdivided/developed lots for a profit in accordance with the Concept Plan. Although the construction works have not yet commenced, you have undertaken several activities in a systematic, organised and business-like manner to execute your commercial objectives. These activities include but are not limited to, initiating and funding legal action in the court to obtain Development Consent, pursuing and negotiating relevant approvals, engaging and funding consultants and construction service providers, negotiating and entering into arrangements with various stakeholders etc. Overall, the facts suggest that the indicators set out in paragraph 178 of MT 2006/1 are present to a sufficient degree to warrant the conclusion that you are carrying an enterprise being a property development enterprise. | Detailed Reasoning - All things necessary for the continued operation of an enterprise: The term 'necessary' incorporates every attribute of an enterprise that is essential for the continued operation of the 'identified enterprise'. What is necessary for the continued operation of an enterprise will depend on the nature of the enterprise carried on and the core attributes of that enterprise. A 'thing' is necessary for the continued operation of an enterprise if the enterprise could not be operated by the purchaser in the absence of the thing. Paragraph 74 and 75 of GSTR 2002/5 provide that: 74. The supplier is required to supply to the recipient all of the things that are necessary to carry on the 'identified enterprise' so that the recipient is put in a position to carry on the enterprise if it chooses. 75. Two elements are essential for the continued operation of an enterprise: • the assets necessary for the continued operation of the enterprise including, where appropriate, premises, plant and equipment, stock-in-trade and intangible assets such as goodwill, contracts, licences and quotas; and • the operating structure and process of the enterprise consisting of the commercial or economic activity relevant to the type of enterprise being conducted, for example, ongoing advertising and promotion Paragraph 80 of GSTR 2002/5 provides that the supplier supplies all of the things that are necessary for the continued operation of an enterprise when the supplier supplies those things which will put the recipient in a position to carry on the enterprise if it chooses. The particular things necessary for the continued operation of an enterprise need to be considered in relation to the identified enterprise. This is a question of fact in each case. For the supply of lots or development land, necessary things may include: • rezoning applications, approvals or deeds, • intellectual property, such as engineering plans for headworks construction and utilities infrastructure and environmental impact studies, • rights of access. For the supply of residential premises under construction, necessary things may include: • title to the land; • council or local authority applications and approvals; • construction schedules; • intellectual property such as names, project plans, construction plans and drawings, and details of covenants; • marketing plans and contracts, and 'off the plan' sales contracts; • quality assurance plans; • assignment of subcontracts and lists of subcontractors; and • a site sales and marketing office. Under the Contract of Sale, you will supply to the Purchaser, the Property and the Related Items. Related Items comprise the Development Consent (which runs with the land and transfers automatically upon settlement) and other essential approvals, VPAs, consultant and supplier agreements for ongoing works and intellectual property from pre-settlement work (such as construction plans, utility designs, infrastructure works, and environmental studies). While some items attach to the land, others are novated or transferred under the Contract of Sale. Collectively, these elements enable the Purchaser to continue operating the enterprise without interruption. Consequently, we consider that you will supply the Purchaser with all things necessary for the continued operation of the property development enterprise, consistent with the requirements for a GST-free supply of a going concern under paragraph 38-325 (2)(a). | Detailed Reasoning - Supplier carries on the enterprise until the day of the supply: Paragraphs 149-150 of GSTR 2002/5 state: Continued operation 149. The term 'carrying on an enterprise' includes doing anything in the course of the commencement or termination of the enterprise. A supplier may carry on an enterprise to the day of the supply for the purposes of paragraph 38-325(2)(b) during the period of commencement or termination of an enterprise. 150. A supplier is unable to supply all of the things that are necessary for the continued operation of an enterprise unless the relevant enterprise is not only being 'carried on', but is also operating. Where an enterprise engaged in an activity ceases to carry on that activity and the assets are in the course of being sold off, the enterprise is being 'carried on', but is not operating. Therefore, the activity must be one which can properly be described as a business or undertaking capable of being handed over to the transferee in such a state that it may be carried on by the transferee if it so wishes. The particular business or undertaking must remain active and operating at the time of supply. The 'day of the supply' is generally accepted to be on completion of the transfer when the supplier has done everything to satisfy the obligations under the contract or arrangement governing the supply and the recipient has assumed effective control of all of the things that are necessary for the continued operation of the enterprise, see paragraph 161 of GSTR 2002/5. In this case, settlement (day of the supply) is scheduled for DD MMM YYYY. You have committed to and are obligated under the contract of sale to undertake various development activities up until the settlement of the supply, including progressing the works with consultants, construction contractors and authorities, introducing the purchaser to the engaged consultants and continue to participate in development negotiations etc as summarised above. While the Purchaser will be involved in meeting and instructing the engaged consultants prior to settlement, you will continue to oversee the delivery of consultant services in accordance with the agreed scope and delivery times up until settlement. Furthermore, you will also be responsible for the remaining agreed consultant costs. Therefore, we consider that you will carry on the identified enterprise - the development enterprise, until the day of the supply. As all of the requirements of section 38-325 will be satisfied, the supply of the Property together with the Related Items specified in the Contract of Sale executed on 16 September 2025 will constitute a GST-free supply of a going concern pursuant to section 38-325 of the GST Act.

You, are registered for GST. You are a member of a GST group. | You are wholly owned by Entity 1, that is ultimately owned by Entity 2. Entity 2 has owned Entity 1 since DD MMM YYYY. | You were established as a vehicle for the purposes of the acquisition, development and sale of the property listed below. | You entered into a put and call option deed with the vendor (Previous Vendor) to purchase a property (the Property). | The option was exercised, and settlement of the Property was completed . | You acquired the Property under the margin scheme. | When purchased, the Property consisted of approximately XXha and comprised paddocks for agricultural use, farm structures and a residential house. | The Property is located within a City Local Government Area and is in close proximity to the X location. The Property was, and remains, part of a Concept Plan for development of a XXha broader parcel of land for the following purposes: | • Retail, commercial, and light industrial, | • Public infrastructure, including roads, parks and schools. | The Concept Plan for a new community was originally approved by the Minister for Planning on DD MMM YYYY pursuant to a state based act. | Development activities undertaken by the Previous Vendor: The Development Application was lodged with the local Council by the Previous Vendor on DD MMM YYYY. | The Development Application comprises development of the following over X stages: | • Demolition of existing structures and improvements | • X low density residential allotments; | • X large lot residential allotments; | • X drainage lots for stormwater infrastructure; | • Provision of roads, drainage and utility infrastructure | The Previous Vendor also entered into X voluntary planning agreements (VPAs). | Development activities undertaken since you acquired the Property: The Development Application was originally rejected. However, in the context of court proceedings, an agreement was reached with certain amendments to the Development Application and additional conditions imposed (Development Consent). The court proceedings commenced after you purchased the Property and the relevant consent was granted (X minor amendment was made as at DD MMM YYYY). | Whilst the proceedings were in the name of the previous vendor (the original applicant for the Development Application), you had carriage (instructing lawyers, considering consent conditions etc) and bore all costs of the proceedings. This aligned with the terms of the contract with the Previous Vendor that granted you the authority to pursue the Development Application. | The Development Consent is subject to extensive conditions. | When you acquired the Property, the rights and obligations under the various existing VPAs were novated to you. | Since acquiring the Property, you have undertaken the following activities in line with the Development Consent: | • Negotiated a VPA with the local Council. | • Engaged various consultants to support you in delivering and coordinating all aspects of the development project. You provided a list of consultants, scope of the works, delivery timeframes and costs incurred. | • Engaged or are close to finalising engagement with key suppliers for preliminary physical works as part of its development activity. | • You have continued to progress various statutory approval processes. | Use of the land whilst undertaking preparatory development activities: Whilst undertaking the above-mentioned development activities in relation to the Property, you have allowed farmers to graze animals on the Property, noting this agistment licence assists you to maintain the property prior to physical development works commencing. There is no formal written licence or similar agreement in place, and no amount of monetary consideration paid by the farmers for the use of the land. You will introduce the farmers to the Purchaser, and it will be for the Purchaser to determine whether to continue to allow the farmers to graze animals for any period of time. | Since it was purchased, you have accounted for the Property as your trading stock. | Sale of the Property: While you continued to carry out the above listed development activities, you decided to sell the Property at en-globo level as well as the development's Related Items. | After an extended off market expression of interest process targeted at selling the en-globo site, you entered a contract for the sale of the Property (Contract of Sale). | The Contract of Sale includes a written agreement that the supply is of a GST-free going concern. | You provided a copy of the Contract of Sale and a number of relevant clauses were considered. | Forming part of the contract of sale are several files. These include the items transferred, novated, assigned, provided or otherwise facilitated for the Purchaser and are for the purposes of this private ruling application referred to as the Related Items. | Included is a list of the Engaged Consultants. | Settlement is scheduled for DD MMM YYYY. | The Purchaser is an entity owned by a national property developer and it intends to continue carrying on the development activities in line with the Development Consent. | The Purchaser is currently registered for GST and will be registered for GST at the time of settlement. | Activities between exchange and settlement: You have committed to undertake various development activities between the exchange and settlement of the Contract of Sale, including progressing the works with consultants, construction contractors and authorities. | You will also undertake various works between exchange and settlement (to the extent possible noting requirement of involvement of third parties), directed towards satisfying conditions of the Development Consent and progressing the development. | You have committed to being consulted or actively involved in the development activities and the various works, to enable the smooth transition and continued progression of the development activities. | Additionally, X of your sister entities will remain involved with the Purchaser's development of the Property post settlement. To this effect, a Development Advisory Agreement and a Right of Refusal Deed have been executed. | Does Division 165 apply to this private ruling?: Division 165 of the A New Tax System (Goods and Services Tax) Act 1999 is a general 'anti-avoidance' rule that can apply in certain circumstances if you or another entity obtains a GST benefit from a scheme that you entered into or carried out for the main purpose of obtaining a GST benefit, or allowing another to obtain one. | It may also apply in some cases where the GST benefit arises as a principal effect of a particular scheme. An entity can get a 'GST benefit' under the GST, Luxury Car Tax or Wine Equalisation Tax laws. | If Division 165 applies, the benefit can be cancelled. For example, we might increase the net amount for a particular tax period. | Unless your private ruling specifically discusses Division 165, we have not considered the application of the anti-avoidance provisions to your case. | If you want us to rule on whether Division 165 applies in your circumstances, contact your contact officer to find out what details we will need to make the private ruling.