Sale of a business as a going concern - checklist

Sale of a business as a going concern - checklist for use with an application for a GST private ruling

Applying for a GST private ruling

You can apply for a GST private ruling by:

• using the Private ruling application form (not for tax professionals) (NAT 13742)
• using the Private ruling application form (registered agent) (NAT 13043),or
• providing in writing, to the best of your ability, all of the information requested on the forms.

If your application is about the GST consequences of the sale of a business as a 'going concern', this checklist will help you to answer question 8 of the Private ruling application form - not for tax professionals (NAT 13742), or question 7 of the Private ruling application form - tax professionals (NAT 13043).

These questions ask you to include facts describing the scheme or circumstance and attach relevant documents.

A going concern

A supply of a going concern occurs when:

• a business is sold, and that sale includes all of the things that are necessary for the business to continue operating, and
• the business is carried on, up until the day of sale.

The supply of a going concern is GST-free if it meets certain requirements including:

• the sale is for a payment or consideration
• the purchaser is registered, or required to be registered, for GST, and
• the seller and the purchaser have agreed, in writing, that the supply is of a going concern.

These requirements are outlined in more detail in section 38-325 of the GST Act and are explained in the Goods and Services Tax Ruling GSTR 2002/5: Goods and services tax: when is a 'supply of a going concern' GST-free? This checklist includes references to paragraphs in this ruling.