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Edited version of private ruling
Authorisation Number: 1011766384388
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Ruling
Subject: GST and registration for the representative of an incapacitated entity
Question
Are you, a Trustee of the Bankrupt Estate of an incapacitated entity, required to register for GST?
Answer: No.
Relevant facts and circumstances
You were appointed a Trustee of the Bankrupt Estate of an incapacitated entity (individual).
At the time of appointment, the individual was carrying on an enterprise but was not registered or required to be registered for GST.
You were required to sell the estate's commercial property.
The individual used this commercial property in running their enterprise.
Reasons for decision
Summary
You are not required to register for GST as the incapacitated entity was not registered or required to be registered for GST at the time of your appointment. Furthermore, you are not required to register for GST as a consequence of selling the bankrupt estate's commercial property.
Detailed reasoning
GST registration for an incapacitated entity's representative
'Representative' and 'incapacitated entity' are both defined in section 195-1 of the GST Act to include respectively a trustee in bankruptcy (which in accordance with the Bankruptcy Act 1966 includes a trustee of a bankrupt estate) and an individual who is bankrupt.
In your case, you are the Trustee of the bankrupt estate of an individual and consequently you are a representative of an incapacitated entity in accordance with section 195-1 of the GST Act.
Section 58-20 of the GST Act provides that a representative of an incapacitated entity is required to be registered in that capacity if the incapacitated entity is registered or required to be registered at the time of appointment. This section has effect despite what is said in section 23-5 of the GST Act about who is required to be registered for GST (section 23-5 provides that an entity must register for GST if it is carrying on an enterprise and its GST turnover is at or above the registration turnover threshold currently set at $75,000 or $150,000 for non profit organisations).
Consequently, it is the registration status of the incapacitated entity (whether registered or required to be registered) that determines whether their representative is required to register under section 58-20 of the GST Act.
Not required to be registered for GST
When you were appointed, the individual was carrying on an enterprise but was not registered or required to be registered for GST. Consequently, as a result of section 58-20 of the GST ACT you were not required to be registered for GST when you were appointed their representative.
As part of your duties as representative, you were required to sell the estate's commercial property that the individual used in the running of their enterprise.
The phrase carrying on an enterprise is defined by section 195-1 of the GST Act to include anything done in the course of, the commencement or termination of an enterprise. Consequently you were carrying on an enterprise when you sold this commercial property.
The sale of the commercial property is the sale of a capital asset however and is not included in your GST turnover as per section 188-25 of the GST Act. Consequently you are also not required to register for GST as a consequence of the sale of the commercial property.