Private ruling: GST
Date of advice: 10 September 2019
Published: November 2019
Date scheme commenced: · Entity A carries on a property development enterprise and is registered for the goods and services tax (GST).

Ruling: Q1: 1. Will the supplies made by Entity A to Purchaser No.1 under the contract of sale and purchase of land (Contract) for Property X be a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? 2. Will the supplies made by Entity A to Purchaser No.2 under the Contract for Property Y be a GST-free supply of a going concern under section 38-325 of the GST Act? 3. Was the Entity's supply of the Call Option under the Deed to Purchaser 1 to purchase Property X a GST-free supply under the GST Act? 4. Was the Entity's supply of the Call Option under the Deed to Purchaser 2 to purchase Property Y a GST-free supply under the GST Act? | A1: 1. Yes. 2. Yes. 3. Yes. 4. Yes.

Relevant facts and circumstances: · Entity A carries on a property development enterprise and is registered for the goods and services tax (GST). · Entity A is the registered proprietor of real Property which includes Property X and Property Y. · Entity A purchased the Property with the intention of developing the Property into multiple lots and apartments for sale. · Entity A has been carrying out property development activities in relation to the development of the Property, continuously to date. · Entity A has supplied a Call Option to Purchaser 1 to purchase Property X and a Call Option to Purchaser 2 to purchase Property Y. · Under the terms of the relevant Call Option Deeds, the parties have agreed that upon exercise of the Call Option, Entity A will enter into an agreement (Sale Contract) with the purchaser, for the sale of the relevant Property, in consideration for payment of the specified price. · Pursuant to the Sale Contract, Entity A will supply the purchaser with the relevant Property, and all the things (tangible and intangible) related to the property development enterprise at settlement date. · Entity A continues to carry on the activities of the enterprise and will continue to operate the enterprise until settlement of the sale. At settlement, Entity A will provide the purchaser with all the things necessary to continue with the property development enterprise in respect of the Property. · Entity A and the purchaser have agreed in writing that the supply is the supply of a going concern. · The purchaser is registered for GST and will remain registered for GST at settlement date. · Under the terms of the relevant Call Option Deeds, the parties have agreed that upon exercise of the Call Option, the supply made by Entity A will be the supply of a GST-free going concern.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-325