| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012723935073
Ruling
Subject: GST and going concern
Question
Is the supply of the premises a GST-free supply of a going concern for the purpose of section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999?
Answer
Yes.
Your supply of the premises will be a GST-free supply of a going concern under section 38-325 of the GST Act.
This is because, on settlement date, you will be providing the purchaser all of things that are necessary for the continued operation of a leasing enterprise, being property and the lease agreement.
In addition, you will continue to carry on the leasing enterprise until the day of the supply.
Finally, there is a clause in the Contract of Sale indicating that you and the purchaser have agreed in writing that the sale is a supply of a going concern, the sale will be for consideration and the purchaser is registered for GST.
Relevant facts and circumstances
You are registered for GST.
You acquired the premises subject to a lease.
The premises are land that is secured with a cyclone fence and a locked gate.
You have continued to lease the premises.
You entered into a Contract of Sale with the purchaser to sell the premises subject to the lease.
You have provided a copy of the Contract of Sale including the lease, containing the assignment of lease rights, and clauses that the parties agree that this contract is for the supply of a going concern, the Purchaser is registered for GST and the Vendor will carry on the going concern until the date of supply.
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 9-80, and
A New Tax System (Goods and Services Tax) Act 1999 Section 38-325.