Private ruling: Supplies by creditors in satisfaction of debts
Date of advice: 6 February 2026
Published: 30 March 2026
Ruling period: 1 July 20XX to 31 December 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the sale of the Property a taxable supply in accordance with section105-5 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the sale of the property is a taxable supply in accordance with section 105-5 of the GST Act.

Relevant facts and circumstances: Entity A does not have an Australian Business Number (ABN) or Tax File Number (TFN) and is not required to have either of these registrations. It is not registered or required to be registered for GST. Entity A acts as a bare trustee for beneficiaries in connection with an input-taxed financial supply being a loan to a third party. The Borrower is the registered proprietor of the Property. The Lender lent funds to the Borrower. The loan was secured by, amongst other things, a mortgage over the Property (Relevant Mortgage). In or about August or September 20XX, the Lender took possession of the Property pursuant to its power as mortgagee. A liquidator was appointed to the Borrower by court order on or about 8 August 20XX. On or about 24 January 20XX, the Lender through its agents, entered into a contract of sale to sell the Property. In May 20XX, the Lender entered into a loan agreement with Entity A whereby Entity A agreed to advance funds to the Lender (Entity A Loan). As security for its loan to the Lender, Entity A took security over the Relevant Mortgage. Given that it is not possible to register a mortgage over the Relevant Mortgage, this was effected by a deed of assignment (Deed of Assignment) whereby: a. The Lender transferred the Relevant Mortgage to Entity A; and b. Entity A agreed that, on repayment of the amounts owed by the Lender to Entity A, Entity A would transfer the Relevant mortgage back to the Lender. Pursuant to the Deed of Assignment, the Relevant Mortgage was transferred to Entity A. Under the Entity A Loan, Entity A agreed that it would discharge its security (insofar as it related to the Property) to allow the Lender to complete the sale of the Property under the Contract of Sale. Completion of the Contract of Sale was effected on 19 August 20XX (Settlement date). The Lender or its representatives attended to all steps necessary to effect the completion of the sale of the Property under the Contract of Sale. The amount of GST calculated on the sale of the Property was collected by the Lender's lawyers and paid into their trust account.

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 Division 105