Edited version of private advice

Authorisation Number: 1052405438397

Date of advice: 12 June 2025

Ruling

Subject: GST - sale of going concern

Question 1

Will <Entity A> (you) be making a GST-free supply of a going concern pursuant to section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you sell the property situated at <address> (the Property)?

Answer 1

Yes. Your sale of the Property will be a GST-free supply of a going concern pursuant to section 38-325 of the GST Act.

This ruling applies for the followingperiods:

DDMMYYYY to DDMMYYYY

The scheme commenced on:

DDMMYYYY

Relevant facts and circumstances

You, <Entity A>, are registered for GST effective from DDMMYYYY.

On <DDMMYYYY>, you purchased a vacant block of land situated at <address> (the Property) for <$amount>.

The Property consisted of <number> parcels of land with a combined total area of <area size>. The property identifiers of the land (the Land) include the following:

•                     Certificate of Title Reference

•                     Lot number(s)

•                     Plan number(s)

<Number> parcels of land are vacant land, and there are no improvements or fixtures on the lots of land.

On <DDMMYYYY>, you entered into a 'Contract of Sale of Real Estate' (the Sale Contract) with <Entity B> (the Purchaser) for the sale of the Property.

On <DDMMYYYY>, you entered into a Deed of Variation for the Sale Contract with the Purchaser.

Settlement date of the sale of the Property will be DDMMYYYY.

The Property will be sold as a going concern for the price of <$amount>.

In the Sale Contract, the purchaser is <Entity B> and/or Nominee. To the best of your knowledge, there will be no nominee at the time of settlement of the Property.

<Entity B> is registered for GST.

Clause <number> of the general conditions to the Sale Contract states:

<number> If the particulars of sale specify that the supply made under this contract is a 'going concern':

(a) the parties agree that this contract is for the supply of a going concern; and

(b) the purchaser warrants that the purchaser is, or prior to settlement will be, registered for GST; and

(c) the vendor warrants that the vendor will carry on the going concern until the date of supply.

On <DDMMYYYY>, you entered into a Lease of Real Estate for commercial property (the Lease Agreement) with <Entity C> (the Lessee) for the lease of the Property, with the lease commencing on <DDMMYYYY>.

From the time you purchased the Property to the time of commencement of the lease arrangement, the Property was vacant land and you have leased the Property to the Lessee as vacant land.

Item <number> of the Schedule to the Lease Agreement provides that the rent payable on the lease is <$amount> per annum, plus GST.

Item <number> of the Schedule to the Lease Agreement provides that the term of the lease is <number> year commencing on <DDMMYYYY> plus a <number> year option.

Item <number> of the Schedule to the Lease Agreement provides that the rent is to be paid in equal monthly instalments.

You provided the tax invoices that you issued to the Lessee on a monthly basis for the lease and the amount payable every month is <$amount>, including GST.

The monthly rent will be reported on your business activity statements (BASs).

The Property will be sold subject to the existing lease.

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 38-325

A New Tax System (Goods and Services Tax) Act 1999 Division 38

A New Tax System (Goods and Services Tax) Act 1999 Division 40

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