Edited version of your private ruling

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Ruling

Subject: Supply of real property

Issue 1: Retransfer of retained dwellings

Question 1(a)

Was the initial creation of rights and entry into the obligation by you to retransfer the retained dwelling to the Seller, a supply and if so:

(i) was any consideration paid for that supply so as to make it a taxable supply, and

(ii) if there was consideration paid for that supply, what is the value of that consideration;

Answer

No, the initial creation of rights and entry into the obligation by you to retransfer the retained dwelling to the Seller is not the relevant thing that is being supplied for GST purposes. Rather these are terms or conditions that define the terms of the arrangement between the parties.

Please refer to reasons for decision for an explanation of our decision.

As the answer to question 1(a) is in the negative it is not necessary to address questions 1(a)(i) and 1(a)(ii)

Question 1(b)

Will the later transfer of the retained dwelling, by you to the Seller be a supply and if so:

(i) is any consideration to be paid for that supply so as to make it a taxable supply for GST purposes?

(ii) if there is consideration to be paid for that supply, what is the value of that consideration?

Answer

Yes, the transfer of the retained dwelling is a supply for GST purposes. However, the supply will not be taxable as it is a supply of residential premises that is input taxed. As the supply is not taxable, it is not necessary to determine the value of the consideration.

Issue 2

Question 2(a)

Was the initial creation of rights and entry into the obligation by you to transfer the vacant lots to the Seller, a supply and, if so:

(i) was any consideration paid for that supply so as to make it a taxable supply? and

(ii) if there was consideration paid for that supply, what is the value of that consideration?

Answer

No, the initial creation of rights and entry into the obligation by you to transfer the vacant lots to the Seller is not the relevant thing that is being supplied for GST purposes. Rather these are terms or conditions that define the terms of the arrangement between the parties.

Please refer to reasons for decision for an explanation of our decision.

As the answer to question 2(a) is in the negative it is not necessary to address questions 2(a)(i) and 2(a)(ii).

Question 2(b)

Will the later transfer of the vacant lots, by you to the Seller be a supply and, if so:

(i) is any consideration to be paid for that supply so as to make it a taxable supply for GST purposes? and

(ii) if there is consideration to be paid for that supply, what is the value of that consideration?

Answer

Yes, the transfer of the vacant lots by you to the Seller is a 'supply' for GST purposes that is made 'for consideration'. The supply is a taxable supply, with the value being the GST-inclusive market value of the transferred lot(s) (as the case may be).

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

The following facts, information and contentions were provided by your tax agent as an attachment to your private ruling application. You have also provided a copy of a specified number of contracts and annexure and a schedule of all the contracts. Also you provided a copy of the decision in a particular court case which has relevance to your ruling request. Additional information was also provided by email by your tax agent in response to our further requests for clarification.

The Transactions

You (the Developer) are the buyer under a specified number of conditional contracts for the purchase of potentially subdividable land situated in Australia. These contracts were all entered into during GST tax periods commencing after 1 July 2000.

Each contract was based on a Real Estate Institute contract for houses and Land supplemented by an annexure containing special conditions. The annexure included a number of conditions that were required to be met to your satisfaction:

The contracts provided for a transfer of the sale land by the Seller, in exchange for payment of an agreed purchase price by you. They also included the following amongst their special conditions (with some variation from contract to contract):

(a) a retention by the Seller of the beneficial interest in an existing residence and the underlying parcel of land in respect of it (retained dwellings), and an obligation by you to retransfer the retained dwellings to the Seller;

(b) an obligation by you to retransfer one or more future vacant subdivided residential lots (vacant lots) to the Seller;

(c) a leaseback to the Seller of the sale land, pending its requirement for development;

(d) agreed treatment for GST purposes included a taxable supply implementing the margin scheme or an input taxed supply.

All contracts were completed, and GST was accounted for on the terms of each contract and on the consideration paid by you to the Sellers.

You intend to discharge your obligation to convey to the Sellers their respective entitlement to the retained dwellings and/or the vacant lots.

Background Facts

You have previously been involved in residential subdivision projects.

After 1 July 2000 you identified the potential for a tract of land in Australia suitable for future development into a residential subdivision.

You resolved to negotiate and enter into contracts for the purchase of that land, with the following objectives:

(a) the contracts would be subject to a formal change of land use,

(b) sufficient parcels should be secured so as to facilitate a viable future residential subdivision; and

(c) the price under the contracts should be as favourable as could be negotiated on your behalf.

There were a specified number of contracts entered into, each with a different Seller. Copies of each contract accompany this Application.

In particular, the contracts entered into by you with various sellers included one or more of the following special conditions:

(a) a retention by the Seller of the beneficial interest in the retained dwellings, and an obligation on you to retransfer the retained dwellings to the Seller after subdivision was complete;

(b) an obligation by you to retransfer one or more future vacant lots to the Seller; and

(c) a lease back to the Seller of the sale land, pending its requirement for development.

The contracts were entered into over a specified period. Details in relation to each of those contracts, particularly identifying the following characteristics, are contained in the Schedule to this Application;

(a) the date of the contract;

(b) the land area owned by the Sellers;

(c) the area of the retained dwelling that was not sold (where relevant);

(d) the area of vacant lots agreed to be retransferred (where relevant);

(e) the net price per square metre paid for land exclusive of retained dwellings and vacant lots.

The Schedule is separated by reference to parcels where there were:

(a) retained dwellings, but no retransfer of vacant lots;

(b) transfers of vacant lots, but no retained dwellings;

(c) both retained dwellings and retransfers of vacant lots; and

(d) no retained dwellings and no transfers of vacant lots.

This Application is made in respect to those contracts which require you to transfer future subdivided retained dwellings, future subdivided vacant lots, or both.

Your tax agent summarised the findings of the court case.

Sample clauses taken from various contracts that you supplied were noted.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5, 9-10, 9-15, 9-40, 9-75, 40-65, 195-1.

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Issue 1

Retransfer of retained dwellings

Detailed reasoning

[Note: For the avoidance of any doubt, for the purpose of this ruling the terms 'transfer' and 'retransfer' are intended to be synonymous as both words have been used in your submission and the Court case referred to above. Our use of either word in context means; (a) the transfer of legal title to the relevant parcel of land from the Seller to you (the Developer) or (b) the transfer of the legal title to the retained dwelling and/or vacant lots by you to the Seller following subdivision.]

The issues in this case stem from the purchase by you of a specified number of acres of potentially subdividable land in a particular Australian State under individual contracts of sale between you and a specified number of individual landowners (referred to as 'Sellers').

You provided a schedule of the contract details. One of the following special conditions applied to a specified number of the contracts.

· an obligation by you to retransfer Seller's retained dwelling after subdivision, or

· an obligation by you to transfer vacant lots of land to the Seller following subdivision, or

· an obligation by you to do both, that is, retransfer the Seller's retained dwelling and to transfer vacant lots of land to the Seller following sub division.

The issue at hand relates to the GST treatment, if any, of the retained dwellings and the vacant lots that are transferred to the Sellers after subdivision under (a), (b) or (c) above.

Under section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) you must pay the GST payable on any taxable supply that you make.

Section 9-5 provides that you make a taxable supply if:

· you make the supply for consideration

· the supply is made in the course or furtherance of an enterprise that you carry on

· the supply is connected with Australia, and

· you are registered, or required to be registered

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

In your submission you have referred to and cited the Court Case. Your tax agent submits that the Court's findings support the view that you are not liable for GST in relation to supplies that you make in meeting your obligations to transfer either a retained dwelling or vacant lot to the Sellers. While your tax agent acknowledges that the transfers fall within the definition of 'supply' for GST purposes, they consider that the supplies are not taxable as they arise as a term in the contract which gives rise to a trust in favour of the Seller. They further submit that the supply would not be taxable as it is not made 'for consideration' and therefore would fail to meet paragraph 9-5(a) of the GST Act.

It is important to note that the specific issue before the Court was whether the contracts between you and a specified number of the Sellers of land contravened a particular provision within another Act and as a consequence, whether the contract was void. The concepts were considered in the context of that particular legislation.

It is necessary at this point to differentiate between the meaning of 'sell' or 'sale' under that legislation and the findings of the relevant Court and the meaning of 'supply' for the purposes of the GST Act.

We consider that the findings of the Court are not pertinent to the GST issues at hand as the concept of 'supply' has a specific meaning that needs to be considered in the context of the GST Act. Therefore, the relevant issue to be considered, is whether you are making a 'supply' when you transfer the retained dwellings or vacant lots to the original vendor(s).

Retained dwellings

Section 9-10 of the GST Act provides that a supply is any form of supply whatsoever and includes amongst other things:

· a grant, assignment or surrender of real property (paragraph 9-10(2)(d));

· a creation, grant, transfer, assignment or surrender of any right (paragraph 9-10(2)(e);

· an entry into, or release from an obligation:

i. to do anything; or

ii. to refrain from an act; or

iii. to tolerate an act or situation.(paragraph 9-10(2)(g)

In answering the question of what has been supplied and characterising that supply, it is necessary to look at the direct object of the supply to determine what is supplied as between goods, services and other things or forms of supply on the one hand and 'rights' and 'obligations', existing independently of those things, on the other.

While the starting point is to examine the terms of the contract, an arrangement between parties will be characterised not merely by the description the parties give to an arrangement, but by looking at the transactions entered into and the circumstances in which the transactions are made.

In your circumstances, the contract(s) provide that both you and the Seller acknowledge that the sale and purchase of the parcel of land does not include the conveyance of the Seller's block and that for the purposes of the conveyance of the property it is agreed that the Seller shall continue to retain equitable ownership of the Seller's Block (hereinafter referred to as the retained dwelling).

The agreement indicates that while legal title is transferred to the whole of the parcel of land, the Seller wishes to retain their interest in relation to the retained dwelling. The Seller is entitled to continue to reside in the retained dwelling with relatively unfettered control of this part of the property while the subdivision is developed by you on the remaining land. Further, the contract expressly creates an obligation for you to hold title to that portion of the land on trust for the Seller until such time as separate title is effected and the 'retained dwelling' lot can be transferred back to the Seller.

While your tax agent submits that the transfer of the retained dwelling is made by you to meet your obligations under the terms of the contract, it does not necessarily follow that your entry into the obligation to do so, is the substance of the supply for GST purposes.

Rather, it is necessary to consider whether the supply made by you is properly characterised as an 'entry into an obligation' to transfer the retained dwelling (with the actual transfer being done merely in performance of those obligations), or whether the transfer of the retained dwelling is a supply of real property in the form of a 'grant, assignment or surrender of real property' under paragraph 9-10(2)(d).

With respect to 'rights' and 'obligations', paragraphs 136 and 137 of Goods and Services Tax Ruling GSTR 2006/9: 'supplies' explain:

136. … Rights are created under executory contracts and although the creation of such rights is supported by valuable consideration, the supply may not be characterised as a supply that is made in relation to rights if, for example, those rights contribute to the supply as a whole but cannot be identified as the dominant part of the supply.

137. The grant of a right or entry into an obligation may be a term or condition of a larger transaction. Where the grant of the right or entry into the binding obligation is the substance of the transaction it will be the subject matter of a supply.^F50

This characterisation by looking to the direct objective of the agreement is further demonstrated in the reason for judgement of Conti J in Saga Holidays Ltd v Commissioner of Taxation [2005] FCA 1892; (2005) 149 FCR 41. At [30] his honour said:

'The Commissioner submitted for operation in the present circumstances the observation of Ralph Gibson J of the Queens Bench Division made in the value-added tax context of Customs and Excise Commissioners v Pippa-Dee Parties Ltd [1981] STC 495.where at 501 the following appears:

It is clear therefore that a technical analysis of one part of a transaction, or of one set of obligations within a contract, even though accurate in legal principle, which is capable of explaining the service supplied, or the consideration given, in a restricted way, is not necessarily the right answer in law to the application of the provisions of this statute. I accept counsel for the Crown's submission that this approach does indicate that taxable transactions should not be artificially dissected so as to demonstrate as being the service provided, or the consideration given, something other or less than that which appears to have been the service provided or consideration given upon an examination of the entire transaction.

That approach to construction of value-added taxation statutes provides support for the Commissioner's asserted 'substance and reality' approach. It is an approach which I think aptly accommodates those provisions of the GST Act falling in particular within Subdivision 9-A of which ss 9-5, 9-10 and 9-25 form an integral part.'

In this case, while the contract contains certain rights and obligations that bind the parties to do certain things, we consider that these rights and obligations are terms and conditions of the Contract of Sale that go to defining the agreement. The primary transaction is the supply of the parcel land by the Seller to you. The rights and obligations contribute to defining the terms of this transaction, but are not the substance of this transaction. We consider that it is not appropriate to separate the rights and obligations arising under the contract from the supply of the parcel land by the Seller to you. Therefore, the 'obligation' to transfer the retained dwelling, of itself, is not the relevant supply that is being made by you.

According to the contract, you are required to transfer the retained dwelling to the Seller following creation of separate title to this lot.

The facts evidence that the Seller intended to retain their interest in the retained dwelling but had to supply the whole parcel of land (legal and equitable interest) to you, as it is not possible to transfer one without the other under the Torrens system. We acknowledge that the Seller would be able to retain its interest by virtue of a caveat and the specific terms of the contract providing for an express trust in favour of the Seller.

However, the transfer of legal title to the 'retained dwelling' lot is a conveyance of real property and is a 'grant, assignment or surrender of real property'. We consider, and your tax agent acknowledges, that this is a supply for GST purposes.

Therefore, the remaining issues to be determined are whether the supply is of real property and whether that supply is taxable.

Section 9-5 provides that a supply is not a taxable supply to the extent that it is input taxed.

Division 40 of the GST Act deals with input taxed supplies. Specifically, section 40-65 provides that a sale of real property is input taxed, but only to the extent that the property is residential premises to be used predominantly for residential accommodation (regardless of the term of occupation), unless to the extent that the premises are commercial residential or new residential premises…

In your case the retained dwelling, including its curtilage has the physical characteristics of residential premises, supported by the fact that it has previously been used by the Seller for their residential accommodation. To that end the retained dwelling exhibits the characteristics of residential premises in that it provides an area for sleeping and the basic facilities for daily living.

We consider that in relation to the retransfer of the retained dwelling the supply is not a taxable supply because it is an input taxed supply of residential premises (we note that the retained dwellings have all been used for residential purposes before 2 December 1998). Therefore, you will not be liable for GST when you supply the retained dwelling to the Seller.

In summary:

· you make a supply of real property when you retransfer the retained dwelling lot to the Seller;

· this supply is not a taxable supply but an input taxed supply of residential premises; and

· as such there is no GST liability for you in relation to the transfer of the retained dwelling. [It should be noted that you would not be entitled to any GST credits for acquisitions made in relation to making this supply.]

Issue 2

Transfer of vacant lots

Detailed reasoning

As discussed in question 1 above the initial creation of rights and entry into the obligation by you, to transfer the vacant lots to the Seller is not the relevant thing that is being supplied by you for the purposes of the GST Act.

We consider that the rights and obligations created under your arrangement with the individual Sellers are terms and conditions of the Contract of Sale that go to defining the agreement under which the parcel land was to be supplied to you. For the reasons already stated, and applying the principles in paragraphs 136 and 137 of GSTR 2006/9, it is not appropriate to separate the rights and obligations from the dominant supply which in this case is the supply of the parcel land (under the primary transaction).

In our view, the contracts entered into provide for the transfer to you of the legal title to the whole of the relevant parcel of land, by the Seller. Subsequently, after subdivision of the land by you and subject to certain conditions of the agreement being met by both parties, vacant lots are conveyed by you to the Sellers.

In characterising the transactions relating to the vacant lots your tax agent states at specified paragraphs of their submission:

Again, the process of an initial transfer of the larger parcel, its subdivision and the later retransfer of the vacant lot, was a necessary titling procedure to give effect to the agreement that the Seller could obtain ownership of the vacant lots.

Consequently, the initial creation of rights in favour of Sellers, and the entry into the obligations by the Developer to retransfer the vacant lots, will qualify as a 'supply' in terms of the wide definition of section 9-10 of the GST Act.

However, it will only be a taxable supply if it was made for consideration.

You submit that the process was a mere titling procedure to give effect to the agreement that the Seller could obtain ownership of the vacant lots as the specific lots did not exist at the time the original sale was made to you by the Seller. You further submit that there is a constructive trust created in relation to the vacant lots which are said to be held by you, as trustee for the Seller. Your tax agent describes this as being akin to a 'bare trust' arrangement.

We note that there is nothing specifically within the agreements that point to the 'object' of any trust in relation to identifying any vacant lots.

Further, we consider that the facts of this case can be distinguished from those involving bare trust arrangements, as in your circumstances you are not merely holding the bare legal title to the property on trust for a beneficiary.

You also contend that 'there is no consistency or pattern discernable in the manner by which you agreed to retransfer vacant lots to some or other of the Sellers. Simply, the creation of the rights and the entry into the obligations were made as inducements to procure the Seller's entry into the contract.'

You further contend that there is an absence of any valuable consideration paid or foregone on the part of the sellers to procure the rights and obligations in relation to the vacant lots to be transferred back by you to the seller. You consider that after the contracts conferring the rights and obligations are signed there is nothing further to be done on the part of the sellers and no additional price is ever paid in order to receive that future supply. You submit that this supply falls within subsection 9-15(3) and as there is no additional consideration provided either for the supply or in connection with the exercise of the right or option, there is no consideration for the supply.

We do not agree with this view (as outlined above) for the following reasons.

In this case, the Seller transfers the whole property to you being the legal and equitable interest in the whole land. As a consequence, you have effective control and ownership of the property which is used by you in carrying on your development enterprise. The title to the property is not merely held passively by you on behalf of the Seller (as would be the case in a 'bare trust' arrangement).

In essence the legal transfer by the Seller to you of the parcel of land gives you control of the whole property (excluding any retained dwelling which is covered by the express trust provided for in the agreement) to allow you to undertake your development activities without any involvement, input or hindrance from the previous owner. The facts indicate that the Seller does not have any control over any part of the property save that they could take legal action for a breach of contract if the requirement to allow them to select a lot after subdivision was not completed. Further the whole of the land now vested in you is an asset that is utilised by you in the carrying on of your enterprise.

The terms of the arrangement provide that following completion of the subdivision works and the issue of the individual titles, the Seller may choose the lots they are entitled to obtain under the terms of the contract.

These lots are not identified on any plan for the subdivision at the time the initial contract is made. The contract merely provides that the selected lot within the development is to be within a radius of an approximate number of metres of the centre of the Seller's land. In all the affected contracts the specified radius would slightly overlap the land's boundaries and as such means only that the lots to be selected by the Seller will be 'somewhere' within the perimeter of the original land.

Upon finalisation of the subdivision, you are obliged to supply the relevant vacant lots as selected by the Seller to them by way of transfer of the legal title (legal and equitable interest) to the relevant lots. Your tax agent acknowledges that this is a supply for GST purposes.

While we agree that the 'transfer' of the vacant lots to the Sellers meets the requirements of section 9-10, for the reasons already outlined (in the explanation provided in relation to the retained dwellings) the rights and obligations are not the relevant thing that is being supplied for GST purposes and it is not appropriate to artificially dissect them from the dominant supply, being the primary transaction involving the sale of the parcel of land by the Seller to you.

We consider that the relevant supply that is made by you is the transfer of the legal and equitable interest in the vacant lots to the Seller following subdivision. This is properly characterised as a supply of a grant, assignment or surrender of real property that falls under paragraph 9-10(2)(d). It follows that you are making a supply of real property when you transfer the vacant lots to some or other of the Sellers.

What remains to be determined is whether the supply (of the vacant land by you to the Seller) is made for consideration and more specifically whether the supply is taxable.

Section 9-15 provides that a payment will be consideration for a supply if the payment is in connection with, in response to or for the inducement of a supply. Thus, there must be a sufficient nexus between a particular payment and a particular supply for the payment to be consideration for that supply.

You submit there is no consideration provided by the Seller in relation to your 'future' transfer of the vacant lots. You further submit that although your subsequent transfer of the vacant lots is a supply, it is not made for consideration.

Consideration is defined in section 195-1 to mean any consideration, within the meaning given by section 9-15, in connection with the supply. The meaning given to consideration in section 9-15 extends beyond merely monetary payments to include such things as acts and forbearances. It may include payments made voluntarily, and payments made by persons other than the recipient of a supply.

With respect to the initial supply of the parcel land by the Seller to you, we consider that the consideration you provide (or are liable to provide) for that supply is comprised of a cash payment (monetary) and the transfer of vacant lots (non-monetary) at a later stage.

Paragraph 16 of GSTR 2001/6 (which provides guidance on GST and non-monetary consideration) states:

16. By providing non-monetary consideration for a supply, you are in turn making a supply. Where this happens, you need to determine the GST consequences of the supply you make. If it is a taxable supply, you need to determine the GST inclusive market value of the consideration you receive for this supply to account for the GST payable. You may also be entitled to claim input tax credits for the supply made to you.

Section 9-75 provides that the value of a taxable supply in so far as the consideration is not expressed as an amount of money, is the GST inclusive market value of that consideration.

Fair market value has long been held as the coming together of a willing buyer and a willing Seller, neither under compulsion to buy or sell and both with knowledge relevant to the marketplace on the date of sale.

While your tax agent submits that the overall negotiated offer to the land owners to include the transfer of vacant lots was an 'inducement' we consider that from a commercial perspective, a value would have been ascribed to the vacant land to be transferred to the Seller in arriving at the total consideration for the sale of the original parcel of land by the Seller to you.

Overall, while you contend that there is no consistency or pattern discernable in the manner by which you agreed to retransfer vacant lots to some or other Sellers there is nonetheless a factor agreed at the outset on the minimum value in relation to size of the vacant lot to be transferred to the Seller following subdivision.

At the completion of the subdivision under the terms of your agreement with the Sellers you provide a plan and price list to the Seller's to enable them to select their particular lots. The vacant lots were to be of a particular size with the particular lot to be chosen after subdivision and at the sole discretion of the Seller. Commercially, it is reasonable to expect the Seller would choose the vacant lot that is valuable to them in terms of size, location or value in relation to their expected benefit from the sale of their land when originally negotiated with you.

Also the fact that the Seller will not accept liability for increased stamp duty costs in the event of the lot being assessed at a higher rate or value lends further support to our conclusion that the notional value of the future vacant lots to be supplied by you was a factor that was considered in determining the amount the Seller would be prepared to accept for their supply of the whole land (primary transaction) to you.

In support of this, we refer to a specified contract as an example and note the following:

· the subdivided lots to be transferred to the Seller will be of not less than a specified number of square metres each in size. Failing this the Buyer (you) will give a cash equivalent on a proportional basis for the deficiency in the size. Your tax agent contends that should such a monetary obligation arise, it would represent compensation. In this case we would view this form of compensation as something given as an 'equivalent for loss.' (Macquarie dictionary)

· you will provide a plan and price list of the lots to allow the Seller to select which lots in accordance with the provision. This indicates that the future value of the lots has been considered by both parties to the agreement (movement in land values accepted).

· you shall pay the balance of stamp duty payable on the balance of consideration which shall exceed a specified amount (if any) in respect of each lot.

· you have agreed to lease back the land to the Seller at a specified rate per acre per week with no charge for continuing to occupy the house. However, we note that there is no mention of the area of the proposed vacant lots to be leased for free. Our conclusion is that this is so because the whole of the land is vested in you with no express trust covering the proposed vacant lots. It is noted in other agreements that where there is a retained dwelling the use of it is specifically noted as being rent free.

We consider that the facts support that your supply of the vacant land was done as part of the agreement with the Seller for them to supply to you of the parcel land. When you transfer the vacant lots to the Seller you are in turn making a supply for consideration. The consideration provided by the Seller is in non-monetary form, being the relevant part of the parcel land. We consider that the effect of the arrangement is that the Seller refrained from charging the full price in cash for the parcel land in return for one or more of the new subdivided vacant lots at market value. This has a direct nexus with the vacant land supplied by you.

The consideration for the supply you are making is non-monetary consideration. It is represented by the difference in the monetary consideration you paid for the Seller's land and the GST inclusive market value of the land at that time.

In summary, as we have determined that your supply of the vacant land is made for consideration and as the other requirements of section 9-5 of the GST Act are satisfied, you will be making a taxable supply of the vacant lots to the Sellers when you transfer the legal title for the vacant lots to the Sellers. As a consequence, you will be liable for GST in relation to the supply of the vacant lots to the Sellers.

GSTR 2001/6 explains that you may determine the GST inclusive market value of the non-monetary consideration for a taxable supply by applying a method that produces a reasonable GST inclusive market value of the consideration. Paragraphs 144 to 158 of GSTR 2001/6 provide examples of methods that are considered to be reasonable. Paragraphs 159 to 197 to GSTR 2001/6 discuss the time when the GST inclusive market value of non-monetary consideration is worked out, the application of the attribution rules where consideration is non-monetary, invoices and non-monetary consideration and when is consideration received or provided. [A copy of this ruling can be accessed on our website at www.ato.gov.au