Private ruling: GST and the supply of real property by a liquidator
Published: July 2014

Ruling: Q1: Is the sale of the property a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 ? | A1: Yes, the sale of the property is a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 .

Relevant facts and circumstances: The relevant facts include all documents and materials provided in the private ruling application. The company was involved in the purchase, development and sale of real property. You were appointed liquidator of the company. At the time of your appointment, the company owned a vacant block located of land. You intend to sell the property using a standard sale of land contract. The company is registered for GST.

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 58-10.

Reasons for decision: Summary: The sale of real property is subject to GST if it is a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). That is, if: • the sale is for consideration; and • the sale is in the course or furtherance of an enterprise; and • the sale is connected with Australia; and • you are registered or required to be registered for GST; and • the sale is neither GST-free nor input taxed. The sale of the vacant block of land will be for consideration (ie payment), it is connected with Australia, the company is registered for GST and the sale of the property is neither GST-free nor input taxed under any provision in the GST Act. Therefore, the sale will be subject to GST if it is made 'in the course or furtherance of an enterprise'. The company was involved in the development and sale of real property. Therefore, the sale of a vacant block of land is 'in the course of' that enterprise. There is nothing to suggest that the property has been used for capital purposes. Even if it was a capital asset of the company, the sale would still be subject to GST. Consequently, the sale of the property is a taxable supply under section 9-5 of the GST Act. Pursuant to section 58-10 of the GST Act it is the representative of an incapacitated entity who is liable to pay the GST on a taxable supply made during the course of the appointment. Therefore, you, as liquidator of the company will be liable to pay the GST on the sale of the property.