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Edited version of your written advice
Authorisation Number: 1012735679497
Ruling
Subject: GST and the sale of property
Question 1
Are you liable for goods and services tax (GST) on the proceeds from the sale of your property?
Answer
No
Relevant facts and circumstances
• You purchased a property in 20XX.
• The property consists of a shop premises downstairs and a residential premises upstairs.
• You commenced and conducted a business in the shop and resided in the flat above the shop.
• In 20YY your business ceased trading and the shop has been disused since.
• Your GST registration was cancelled as of 1 July 20ZZ.
• You placed the property on the market in 20AA and have recently entered an agreement with a buyer.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999
Section 23-5
Section 188-25
Reasons for decision
Summary
The sale of the property is made in the course of terminating your enterprise. The commercial property is a capital asset and as such the sale of the property is not taken into account when calculating your GST turnover. As a result you are not required to be registered for GST and therefore no GST will apply to the sale of the property.
Detailed reasoning
The sale of the property is that of a mixed supply being the sale of your residence and the commercial property below. The sale of your private residence is not made in the course of any enterprise and no GST applies to that portion of the sale.
The commercial property from which you ran your shop is a capital asset the disposal of which is done in the course of terminating your enterprise. Under section 188-25 of A New Tax System (Goods and Services Tax) Act 1999 the value of this supply does not form part of calculating your GST turnover for the purposes of GST registration. This means that your turnover will not meet the registration threshold so you will not be required to register for GST.
As you are not registered or required to be registered for GST no taxable supply is made. Therefore no GST is payable and no tax invoice must be issued.
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