ATO Interpretative Decision

ATO ID 2006/245

Goods and Services Tax

• This ATO ID contains references to provisions of the A New Tax System (Goods and Services Tax) Regulations 1999, which have been replaced by the A New Tax System (Goods and Services Tax) Regulations 2019. This ATO ID continues to apply in relation to the remade Regulations.

  A comparison table which provides the replacement provisions in the A New Tax System (Goods and Services Tax) Regulations 2019 for regulations which are referenced in this ATO ID is available.

  With effect from 1 July 2015, the term 'Australia' is replaced in nearly all instances within the GST, Luxury Car Tax and Wine Equalisation Tax legislation with the term 'indirect tax zone' by the Treasury Legislation Amendment (Repeal Day) Act 2015. The scope of the new term, however, remains the same as the repealed definition of 'Australia' used in those Acts. For readability and other reasons, where the term 'Australia' is used in this document, it is referring to the 'indirect tax zone' as defined in subsection 195-1 of the GST Act.

Issue

Is the entity, a trustee of a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993), liable for GST under section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), in respect of the supply of information about a member spouse's superannuation interest to a non-member spouse in accordance with the requirements of the Family Law Act 1975?

Decision

Yes. The entity is liable for GST under section 9-40 of the GST Act on the supply of information about a member spouse's superannuation interest to a non-member spouse in accordance with the requirements of the Family Law Act, as the entity makes a taxable supply of the information under section 9-5 of the GST Act.

Facts

The Family Law Legislation Amendment (Superannuation) Act 2001 allows the parties to a marriage to make a superannuation agreement, in the context of a financial agreement. The agreement specifies how a superannuation interest will be divided when the parties separate. Superannuation agreements will be binding if they comply with the requirements of Pt VIIIB of the Family Law Act. When a superannuation agreement is binding, the entity will be required by law to give effect to the agreement.

If the parties are unable to agree about how to divide a superannuation interest on separation, the court will have the power to make an order about a superannuation interest that will bind the third party superannuation trustee. An order about a superannuation interest will be made in proceedings for a property order under section 79 of the Family Law Act. Such an order will usually be made as part of a broader court order dealing with any property not covered by a financial agreement.

In order to calculate the value of a superannuation interest, the parties to a superannuation agreement or the court will need certain information from the entity.

The entity must provide information, on request from an eligible person, about the superannuation interest of a member. Only the member, a spouse of the member and a person who intends to enter into a superannuation agreement with the member (that is, under a pre-nuptial superannuation agreement) can be an eligible person.

A person applying for information from the entity must make a declaration that the information is required for either or both of the following purposes:

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to assist the applicant to properly negotiate a superannuation agreement, and

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to assist the applicant in the operation of the relevant Family Law provisions.

The entity is registered for GST purposes, and charges a fee for the provision of such information (connected with Australia) in the course of the enterprise that it carries on.

There are no facts to indicate that a GST-free supply has been made.

Reasons for Decision

In accordance with section 9-40 of the GST Act, an entity is liable for GST on any taxable supply that it makes.

Under section 9-5 of the GST Act, an entity makes a taxable supply if:

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it makes the supply for consideration

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the supply is made in the course or furtherance of an enterprise that it carries on

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the supply is connected with Australia, and

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the entity is registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

To satisfy the first requirement in section 9-5 of the GST Act, an entity must make a 'supply' for 'consideration'. Paragraph 47 of Goods and Services Tax Ruling GSTR 2001/6 provides that there needs to be a supply, a payment and the necessary relationship between the supply and the payment.

Subsection 9-10(1) of the GST Act provides that a 'supply' is any form of supply whatsoever. Without limiting this meaning, paragraphs 9-10(2)(c) and 9-10(2)(f) of the GST Act respectively state that a 'supply' includes:

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a provision of advice or information, and

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a financial supply.

Subsection 9-15(1) of the GST Act provides that consideration includes any payment, or any act or forbearance, in connection with, in response to or for the inducement of a supply of anything.

The entity's provision of information about a member spouse's superannuation interest to the non-member spouse for a fee is a supply for consideration. The positive requirements of section 9-5 of the GST Act are satisfied. Therefore it is necessary to consider whether the supply made is GST-free or input taxed.

The facts of the case do not suggest that the supply is GST-free under Division 38 of the GST Act. Therefore, it needs to be considered whether the supply is an input taxed supply under Division 40 of the GST Act.

Section 40-5 of the GST Act establishes that a financial supply is input taxed and has the meaning given by the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).

In accordance with regulation 40-5.09(1) of the GST Regulations, the provision, acquisition or disposal of an interest in or under a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) is a financial supply where the provision, acquisition or disposal of that interest is:

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for consideration

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in the course or furtherance of an enterprise

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connected with Australia,

and the supplier is

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registered or required to be registered; and

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a financial supply provider in relation to the supply of that interest.

In this case, the entity provides an interest in a regulated superannuation fund (financial interest) to the member only-this being a financial supply. The supply of information by the entity to the non-member spouse is a separate supply. Consequently, any payment made by the non-member spouse is for the information and is not in connection with the financial supply made by the entity to the member spouse.

There is no item in subregulation 40-5.09(3) of the GST Regulations that mentions the supply of information by the entity to the non-member spouse. Accordingly, the entity does not make an input taxed financial supply to the non-member spouse.

Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it provides information about a member spouse's superannuation interest to a non-member spouse. The entity will be liable for GST under section 9-40 of the GST Act.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   subsection 9-10(1)
   paragraph 9-10(2)(c)
   paragraph 9-10(2)(f)
   subsection 9-15(1)
   section 9-40
   section 40-5

Related Public Rulings (including Determinations)
Goods and Services Tax Ruling GSTR 2001/6

Related ATO Interpretative Decisions
ATO ID 2006/246

Keywords
Goods and services tax
GST financial supplies
GST superannuation funds
Input taxed supplies

Siebel/TDMS Reference Number:  3469736

Business Line:  Indirect Tax

Date of publication:  8 September 2006

ISSN: 1445-2782