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Edited version of your written advice
Authorisation Number: 1012858844736
Date of advice: 14 August 2015
Ruling
Subject: GST and the sale of a farm
Question
Will there be GST on the sale of your Farm?
Answer
No. There will not be GST on the sale of your Farm.
One of the requirements of a taxable supply is that you are registered or required to be registered for GST.
You are not registered for GST as your current GST turnover for the farming enterprise is below $75,000.
The proposed sale of the Farm will be the sale of a capital asset and the sale amount will be disregarded when calculating your projected GST turnover.
As the sale amount is excluded from the calculation of your GST turnover, you will not be required to be registered for GST.
Therefore, you are not making a taxable supply when you sell the Farm and there will be no GST applicable to the sale.
Relevant facts and circumstances
Entity A and Entity B (You) are not registered for GST.
You are carrying on a farming enterprise at the Farm.
You have been carrying on a farming enterprise since purchase.
Entity B was registered for GST in relation to the farming enterprise however the GST registration was cancelled as the historical and projected GST turnover for the farming enterprise is less than the $75,000 GST registration threshold.
You are in the process of selling the Farm and the purchaser will not be conducting a farming enterprise on the Farm.
The farming enterprise will cease when the Farm is sold.
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 9-40
A New Tax System (Goods and Services Tax) Act 1999 Section 23-5
A New Tax System (Goods and Services Tax) Act 1999 Section 40-65
A New Tax System (Goods and Services Tax) Act 1999 Division 188
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