Private ruling: GST and property
Published: September 2014

Ruling: Q1: Is the sale of the land by the trustee an enterprise requiring GST registration? | A1: No, the sale of the land by the trustee is not an enterprise requiring GST registration

Relevant facts and circumstances: The deceased purchased the land consisting of several lots pre July 2000. One of the lots has a dwelling when the deceased purchased the land. This has been the deceased's principal residence until they moved into residential care on post July 2000. It was vacant until sold. One of the lots was used variously over the years for growing crops, eggs and poultry for modest supplementary income and for own consumption. None of the land was sold prior to their death on post July 2000. The executor (trustee) sold all lots together and completed the contract post July 2000.

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 23-10 | A New Tax System (Goods and Services Tax) Act 1999 subsection 58-20(1)

Reasons for decision: Summary: Section 23-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that an entity may register for GST if it is carrying on an enterprise or intends to carry on an enterprise. Section 9-20 of the GST Act defines 'enterprise' to include, amongst other things, 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. In this case, the deceased did not carry on any enterprise and hence was not required to be registered for GST under section 23-10 of the GST Act. Subsection 58-20(1) of the GST Act provides that the representative of an incapacitated entity is required to be registered in that capacity, if the incapacitated entity is registered or required to be registered for GST. In this case, as the deceased was neither registered nor required to be registered for GST, the trustee of the deceased estate is not required to be registered for GST. Under section 9-5 of the GST Act, among other things, an entity makes a taxable supply if the entity is registered or required to be registered for the GST. Therefore, where an entity is neither registered nor required to be registered, such an entity cannot make a taxable supply. Accordingly, the sale of the land by the trustee of the deceased estate will not be a taxable supply.