Private ruling: GST - sale of deceased estate's property
Date of advice: 2 June 2026
Published: 17 August 2026

Ruling: Q1: Does the sale of the property comprised in Certificate of Title Folio Identifier X/XXX by the Trustee for X Estate (the Estate) on XX XXX XXXX constitute a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. | Q2: Does the sale of the property comprised in Certificate of Title Folio Identifier Y/YYY by the Estate on XX XXX XXXX constitute a taxable supply under section 9-5 of the GST Act? | A2: No.

Relevant facts and circumstances: X passed away on XX XXX XXXX (the Deceased). They were survived by their spouse Z and X children. XX and the spouse Z are the Executors and Trustees of the Estate. Probate of the Deceased's Estate was granted on XX XXX XXXX. The Estate has held its ABN since XXX XXXX as a deceased estate and is not currently, and has never been, registered for GST. The Estate applied for an ABN when a portion of the land was resumed by the relevant state department, to ensure ABN withholding would not apply. The Estate has never held the ABN in connection with any form of business that it carried on. Spouse Z has an ABN and is currently and has been registered for GST since XX XXX XXXX in their individual capacity. Spouse Z is registered for GST in their capacity as the developer of a service station (the Service Station) and takeaway food outlet (the Takeaway) on the property. The Deceased was once registered for GST in respect of a primary production enterprise carried on by them on the property, but this GST registration was cancelled in XXXX when the business was restructured into a family trust, the Trustee for X Family Trust (ABN XX XXX XXX XXX) (the Family Trust). The Family Trust was registered for GST from XX XXX XXXX to XX XXX XXXX, and its ABN was cancelled on XX XXX XXXX. The Family Trust did not pay any rent to the Deceased for the use or occupation of the property prior to their passing. Property Assets of the Estate included real property known as XX Road, XXX, XXX (the Property), being the whole of the land comprised of: • Certificate of Title Folio Identifier X/XXX (Lot X); and • Certificate of Title Folio Identified Y/YYY (Lot Y). Lot X At the date of sale, Lot X comprised vacant land with no buildings, structures, or other improvements situated on the property, other than one large and two small dams. The land was used for cattle grazing and general farming operations. There were no improvements whether structural or non-structural to Lot X since it became an asset of the Deceased Estate. The subdivision of Lot X was carried out in connection to an acquisition by the relevant state department. The state department carried out the subdivision of Lot X so that it could compulsorily purchase the land required for public road widening of the XX Road. While the acquisition was not technically described as a 'compulsory acquisition,' the Estate was required under the relevant act to transfer the relevant portion of the land to the state department. The Estate did not resist the acquisition but were obliged to sell and accept the compensation offered. As such Lot X was reduced from an area of XX hectares to XX hectares in XXXX. Lot Y The Lot Y was previously part of a larger XX hectares land, lot YY (Original Lot YY). The Original Lot YY was used for farmland operations and principal place of residence. Shortly after purchase, a residence and a large farm shed were built. The state department purchased a substantial area of land from Original Lot YY on XX XXX XXXX as part of a road widening project. The state department carried out the subdivision of Original Lot YY as part of the compulsory road widening project, whereby Lot Y was created for its reduced area of XX hectares. Following the XXXX subdivision of Original Lot YY, the Estate entered into a Put and Call Option agreement for the sale of Lot Y, whereby it was stipulated that lodging any application for rezoning would be the Purchaser's responsibility. Original Lot YY was zoned as rural. The Deceased did not make any applications for rezoning in relation to the Original Lot YY or new Lot Y. At the Deceased's date of death, the Deceased was the sole owner of the Lot X and Original Lot YY. Both properties were acquired by the Deceased in the XXXXs. The decision to sell Lot X and Y formed part of the administration of the Estate and was undertaken as part of a realisation and liquidation of the Estate's assets, with the intention of distributing the proceeds to the beneficiaries. Under the Deceased's will, the Estate was granted no authority to undertake any activities beyond converting assets into cash and distributing the proceeds to the beneficiaries. Activities of the Estate Residential leases on Lot Y As part of further Orders issued, updating the probate on XX XXX XXXX (the Probate Orders), spouse Z was ordered to receive up to X consecutive X-year leases of the residential premises being part of Lot Y being the dwelling and surrounding curtilage (approximately X hectares). Such leases being free of any rental or occupation fee. Since XX XXX XXXX, the Estate has leased the small portion of Lot Y which contains the residential premises to spouse Z, for no rent. Service Station development on Lot Y The Deceased secured a development approval (the DA) for Original Lot YY on XX XXX XXXX to allow construction of the Service Station and Takeaway. The DA was lodged with the council on XX XXX XXXX. Following the death of the Deceased, the DA was due to expire on XX XXX XXXX, but a friend of the Deceased successfully submitted an application to extend the expiry date to XX XXX XXXX to prevent the DA from expiring. The application to extend the DA's expiry date was lodged by XXX firm, acting on the instructions of the Executors of the Estate. Following the state department's acquisition and subdivision of Original Lot YY, new Lot Y retained the benefit of the DA. In addition to this action, the Estate was required to sign certain council documentation as the registered owner of the land. There has been no legal transfer of the DA, but spouse Z essentially took over the DA. The following development activities were approved by the council: • a service station with X double side bowsers for cars covered by a canopy. Separate fuelling area for trucks with X double sided bowsers covered by a canopy; • a service centre building with a gross floor area of XXm² (comprising retail floor space and associated café) and proposed to operate X hours a day, X days a week; • a take away food premise with a gross floor area of XXm² with X seats and drive through facility; • off street carparking for XX cars and XX trucks; • associated earth works, drainage and landscaping works; and • left-in, left-out vehicular access to the X Road. Spouse Z, in their individual capacity, developed the Service Station and Takeaway on Lot Y, whereby they engaged all consultants with respect to the development, including obtaining all building plans. The development was overseen by, and was at the cost of spouse Z. At no time did the Estate hold an intention of developing Lot Y, and other than taking certain minor administrative actions to protect the DA, has undertaken no activities with respect to the developments on Lot Y undertaken by spouse Z in their own capacity, pursuant to the lease of that section of Lot Y granted by the Estate. The Service Station and Takeaway were constructed over a period of X years and commenced operations in late XXXX. The Estate had no involvement in the development. Service Station lease on Lot Y The Estate (the Lessor) has leased the Service Station land to spouse Z (the Lessee) for nominal rent since XX XXX XXXX. The rent payable for each X-year lease was $X. Clause X of the Service Station lease stated that the Lessee has obtained a DA dated XX XXX XXXX, and the Lessor acknowledges that the Lessee has commenced the development. The Lessor consents to the continuation of the development. Clause X states that the Lessee is granted an option to purchase the premises for $X. Spouse Z developed the Service Station and Takeaway land in their own capacity, using their own funds. Once the Service Station and Takeaway were built, from XX XXX XXXX onwards, spouse Z subleased the Service Station and Takeaway properties to their family trust, the XX Family Trust with XX entity acting as trustee (ABN XX XXX XXX XXX) (the Family Trust X). The Family Trust X has been registered for GST from XX XXX XXXX. The Family Trust X in turn subleased the land to third parties who operate the retail outlets. Any income from the subleases is received by the Family Trust X. The Estate has no involvement with the subleases. Farming operations on Lot X and Lot Y At the time of the sales in XXXX and XXXX, Lot X and Lot Y was rural land that was historically also used for livestock agistment/grazing activities. As part of the Probate Orders, Order X stated that the Executors shall, until the completion of the transfer of Lots X and Lot Y, permit the Plaintiff (i.e. spouse Z) to graze livestock on the lots with no occupation fee, subject to various terms imposed on the Plaintiff. The children of spouse Z have been undertaking livestock agistment activities on both Lot X and Lot Y, for the purpose of breeding livestock for sale. These activities are carried out by an unincorporated partnership between the children which is registered for GST since XX XXX XXXX (the Partnership). There was no formal lease of Lot X and Lot Y to either the Family Trust or the Partnership. The Family Trust and Partnership were supposed to pay rent for their use of Lot X and Lot Y, but as the farming businesses were in financial difficulty, no rent was ever paid. The Estate has had no involvement with respect to the farming activities and has received no payment for these activities and/or with respect to right of access of the land. Sale of Lot X The Estate entered into a contract of sale with the Lot X Initial Purchaser on XX XXX XXXX to sell Lot X (Lot X Initial Contract of Sale). The Lot X Final Contract of Sale extended the terms to allow XX, an entity nominated by the Lot X Initial Purchaser, to acquire Lot X. The Estate sold Lot X to XX (Lot X Final Purchaser). Clauses X and X of the Lot X Final Contract of Sale specified that the sale was not subject to GST on the basis that the Estate was not registered for GST, nor required to be registered, and that the Estate was not supplying the land in the course or furtherance of an enterprise that it carried on. The Final Contract of Sale for Lot X provided that the supply of Lot X would alternatively be treated as a GST-free supply of farmland. It also included clauses under which the supplier and the purchaser agreed to take all necessary steps to satisfy the requirements for the supply to be a GST-free farmland under section 38-480. The purchase price of Lot X was $XX (GST exclusive) and the settlement date on XX XXX XXXX. Sale of Lot Y On XX XXX XXXX, a contract of sale (Lot Y Initial Contract of Sale) was exchanged between the Estate and YY entity (Lot Y Initial Purchaser). A new sales contract for Lot Y was created in XXX XXXX, which introduced a new purchaser, the Y entity (Lot Y Final Purchaser). On XX XXX XXXX, the Lot Y Initial Contract of Sale was rescinded, and the final sales contract between the Estate and the Lot Y Final Purchaser was exchanged and completed (Lot Y Final Contract of Sale). The final purchase price of Lot Y was $XX. Special Conditions Clause X to the Final Contract of Sale for Lot Y stated that the Final Purchaser of Lot Y would purchase the property subject to the following tenancies: • X consecutive residential leases to spouse Z, each with a term of X years of which the last expires in on XX XXX XXXX (Residential Leases) and; • a Lease of the Service Station Land for XX years to spouse Z (the Service Station Lease) whereby initially X consecutive leases of X years each are issued, and on the expiration of each X-year team, a new lease replaces the expired one until full XX year term is taken up. Clause X of the Special Conditions to the Lot Y Final Contract of Sale stated that the supply was not subject to GST because the supplier was not registered for GST and it did not supply the land in the course or furtherance of an enterprise that it carries on. Clauses X and X of the Special Conditions to the Final Contract of Sale for Lot Y provided that alternatively, the supply would be partly input taxed residential premises (to the extent of the Residential Leases land) and the remainder be treated as either a GST-free supply of farmland or a GST-free supply of a going concern. Where none of the above treatments apply, and the sale is a taxable supply, the parties agree to treat the supply under the margin scheme and a GST gross-up clause is included, requiring the purchaser to pay an additional amount on account of GST to the Supplier. The Lot Y Final Contract of Sale was executed and settled on XX XXX XXXX.

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 9-15 | A New Tax System (Goods and Services Tax) Act 1999 section 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 72-5 | A New Tax System (Goods and Services Tax) Act 1999 section 188-15 | A New Tax System (Goods and Services Tax) Act 1999 section 188-20 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Detailed Reasoning - 9-5 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. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. Division 38 and 40 provide for certain supplies to be GST-free and input taxed respectively. For a supply to be a taxable supply, all the requirements in section 9-5 must be satisfied. The GST Act does not define the term supplier , but it refers to the entity making the supply. It is accepted that, when a person dies, their property vests in the estate, with the executor or administrator responsible for managing its affairs. Executors act in a capacity analogous to trustees, and distinct from their personal capacities. In this case, spouse Z and XX were acting in their capacities as the Executors and Trustees of the Estate, and are therefore considered to be the suppliers of Lot X and Lot Y in their representative roles. This is aligned with subsection 184-1(3) which provides that a person may act in multiple capacities, with each capacity treated as a separate entity for GST purposes. Pursuant to subsection 9-10(1), a supply includes any form of supply whatsoever, including a supply of real property, paragraph 9-5(2)(d). In this case, the sale of Lot X and Lot Y constitutes a supply of real property. There is a clear nexus between the supplies of Lot X and Lot Y by the Estate and the consideration received, satisfying subsection 9-5(a). Furthermore, as both Lots are situated in Australia, the supplies are connected with the indirect zone satisfying the requirement in subsection 9-5(c). It is necessary to determine whether any of the following applies to the Estate: • whether the supplies of Lot X and Lot Y was made in the course or furtherance of an enterprise it carried on, subsection 9-5(b), • whether the Estate was required to be registered for GST, subsection 9-5(d), and • whether the supply is GST-free or input taxed. | Detailed Reasoning - Enterprise: Subsection 9-20(1) defines the term enterprise and states that: 9-20 Enterprises (1) An enterprise is an activity, or series of activities, done: (a) in the form of a *business; or (b) in the form of an adventure or concern in the nature or trade; or (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or ... The meaning of enterprise is considered in 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), and Goods and Services Tax Determination GSTD 2006/6 Goods and services tax: does MT 2006/1 have equal application to the meaning of 'entity' and 'enterprise' for the purposes of the A New Tax System (Goods and Services Tax) Act 1999? (GSTD 2006/6). Paragraph 10 of GSTD 2006/6 provides that 'an activity or series of activities' means any act or series of acts undertaken by an entity. These acts can range from a single act or an undertaking, to groups of related activities, to the entire operations of the entity. Therefore, an enterprise can incorporate a single or one-off transaction such as the subdivision and sale of real property. | Detailed Reasoning - In the form of a business: The phrase 'in the form of' contained in the definition of an enterprisehas a wider meaning than the word 'business' on its own. Section 195-1 of the GST Act defines business to include ' any profession, trade, employment, vocation or calling, but does not include occupation as an employee. ' This definition is consistent with that used in subsection 6(1) of the Income Tax Assessment Act 1936 and in section 995-1 of the ITAA 1997. The term business ordinarily encompass a trade engaged in on a regular or continuous basis, whereas an adventure or concern in the nature of trade may be an isolated or one-off transaction. Such an adventure includes a commercial activity that does not amount to a business but nevertheless has the characteristics of a business deal. Paragraph 13 of GSTD 2006/6 further explains that an adventure or concern in the nature of trade includes a commercial activity that does not amount to a business, but which has the characteristics of a business deal. Isolated transactions with a commercial flavour are included in this category. Such transactions are of a revenue nature. In determining whether an activity is carried on in the form of a business, MT 2006/1 confirms that the indicators articulated in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? (TR 97/11) are relevant for GST purposes. These indicators involve an objective assessment of the facts and circumstances and include, among other things, a profit-making intention, repetition and regularity of activities, the scale and commercial nature of the activity, and whether it is conducted in a systematic and businesslike manner. Paragraph 178 of MT 2006/1, referencing TR 97/11, identifies the following indicators of a business: • 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. Lot X, being a vacant land, was leased by the Estate to the Family Trust and the Partnership, however, no income was ever derived from that arrangement. Lot Y, comprising a residential dwelling, as well as the Service Station and Takeaway land, was leased for no consideration and for a nominal amount of $X every X years, respectively. The term 'enterprise' includes an activity or series of activities conducted on a regular or continuous basis in the form of a lease, licence, or other grant of an interest in property. Notwithstanding that little or no income was derived from the Property, the arrangements were carried out on a regular and continuous basis through leasing, thereby constituting supplies made in the course or furtherance of an enterprise. While the Family Trust, the Family Trust X, and the Partnership, being associate entities, carried on the substantive income-generating activities, including primary production and subleasing, the Estate itself carried on leasing activities in respect of the Property. The purpose of the sale of the Property was undertaken to wind up the Estate and distribute assets to beneficiaries. The term 'carrying on' is defined in section 195-1 and ensures that activities done in the course of commencement or termination of an enterprise are included in determining whether the activities of the entity amount to an enterprise. If follows that activities done by an entity that are part of a process of beginning or bringing into existence an enterprise are activities in carrying on an enterprise. Therefore, the supply of the Property was made in the course of terminating the leasing enterprise, satisfying subsection 9-5(b). We now need to determine whether the Estate was required to be registered for GST. | Detailed Reasoning - GST registration requirements: Under section 23-5 of the GST Act, an entity is required to be registered for GST if they are carrying on an enterprise and their GST turnover meets the registration turnover threshold of $75,000 (on a rolling 12-month basis). In calculating GST turnover, subsections 188-15(3) and 188-20(3), relating to current and projected GST turnover respectively, exclude certain supplies. Relevantly, these exclusions include input taxed supplies and supplies that are not for consideration (and are not taxable supplies under section 72-5). Section 72-5 provides for supplies without consideration and states that: 72-5 Taxable supplies without consideration (1) The fact that a supply to your *associate is without *consideration, does not stop the supply being a *taxable supply if: (a) your associate is not *registered or *required to be registered; or (b) your associate acquires the thing supplied otherwise than solely for a *creditable purpose. (2) This section has effect despite paragraphs 9-5(a) and 84-5(1)(a) (which would otherwise require a taxable supply for the consideration). Furthermore, section 188-25 provides that the following supplies are to be disregarded in calculating projected GST turnover: • supplies made, or likely to be made, by way of transfer of ownership of a capital asset, and • supplies made, or likely to be made as a consequence of ceasing to carry on an enterprise, or substantially and permanently reducing the size or scale of an enterprise. | Detailed Reasoning - Mere realisation of capital assets: Paragraphs 233-261 of MT 2006/1 explain that the distinction between a mere realisation of a capital asset and an adventure in the nature of trade requires an objective assessment of all the circumstances, including the taxpayer's background and prior activities. Furthermore, paragraphs 262 to 302 of MT 2006/1 consider isolated transactions and sales of real property. TR 92/3 provides guidance in determining whether profits from isolated transactions are assessable income. Under paragraph 6 of TR 92/3, the key factors in determining whether profits from an isolated transaction are assessable income are whether: • the taxpayer entered into the transaction with the intention or purpose of making a profit or gain; and • the transaction was entered into, and the profit made, in the course of carrying on a business or in carrying out a business operation or commercial transaction. If these elements are satisfied, the transaction will generally not be characterised as a mere realisation of a capital asset. The term capital assets is not defined in GST Act but is discussed in Goods and Services Tax Ruling GSTR 2001/7 Goods and services tax: meaning of GST turnover, including the effect of section 188-25 on projected GST turnover in paragraphs 31-36. Capital assets are those assets that form the profit yielding subject of an enterprise, whereas a revenue asset is one whose realisation is inherent in, or incidental to the carrying on of a business. In this case, the Property was leased to the Family Trust, Family Trust X, and the Partnership for the purpose of generating income. Accordingly, it was held as an investment asset rather than as trading stock. The mere realisation of an investment asset does not constitute a trading activity. Therefore, the sale of Lot X and Lot Y represents a mere realisation of capital assets. As the Estate's disposal of the Property is considered a mere realisation of capital assets, it is excluded from the calculation of projected GST turnover. Given that the Estate is neither registered nor required to be registered for GST, the requirement in paragraph 9-5(d) is not satisfied. Consequently, the sale of Lot X and Lot Y does not meet all the criteria for a taxable supply, and GST is not applicable to the respective sale transactions.