Private ruling: GST and sale of a going concern
Date of advice: 13 August 2024
Published: 23 September 2024
Ruling period: ddmmyyyy to ddmmyyyy

Ruling: Q1: Is the sale of the Property with the lease intact 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)? | A1: Yes. Based on the information provided, the sale of the Property with the lease intact to the Purchaser is a GST-free supply of a going concern as it meets all the requirements of section 38-325 of the GST Act as follows: • you sold the Property for consideration • the Purchaser has been registered for GST since ddmmyyyy • you and the Purchaser agreed in writing that the supply is of a going concern • you sold the Property to the Purchaser with the lease intact, and • you carried on the leasing enterprise until the date of settlement.

Relevant facts and circumstances: You purchased the Property on a specified date. The sale of the Property to you was treated as a taxable supply on which GST was paid without applying the margin scheme. The Property was a vacant land with no existing structures or developments other than a fence surrounding the land. The land size is X sqm. You acquired the Property with the intention to develop residential units on the Property. A Planning Permit was granted on a specified date for development of the residential units. On a specified date, you and the Purchaser executed a contract for the sale of the Property (Contract) under which you were to sell the Property to the Purchaser. The Contract includes the following relevant terms and conditions: • The Purchaser purchases the Property subject to the lease granted pursuant to the Contract. • The sale of the Property is a supply of a going concern. On a specified date, you and the Lessee executed the Lease. The key terms of the Lease, as noted in the Schedule to the Lease, are as follows: • The commencement date of the Lease is a specified date, with a term of X months. • The Lease is over the entire of the Property. • The Lessee may use the Property for the specified purposes. • Rent is payable at a rate of $X (inclusive of GST) per annum, being $X (inclusive of GST) per calendar month. • Rent is payable monthly in arrears. Settlement for the sale of the Property occurred on a specified date. You received rental income and issued invoices for the lease of the Property until the settlement date.

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