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Edited version of your written advice
Authorisation Number: 1012752643637
Ruling
Subject: GST and going concern - leasing enterprise
Question
Will your supply of the property located in Australia be 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 property will be a GST-free supply of a going concern.
This is because, on settlement date, you will be providing the purchaser all of the things that are necessary for the continued operation of a leasing enterprise, being the 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 sale contract 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 are part of a GST group of which Entity A is the group representative.
You acquired a commercial property located in Australia (the property) as a taxable supply on ddmmyyyy. You entered into a lease of the property to Entity A on mmyyyy with a commencement date of mmyyyy. You supplied a copy of the lease agreement between you and Entity A with a X year lease.
You entered into a contract to sell the property on the mmyyyy and supplied a copy of the contract.
The contract sets out that the:
• property is to be sold subject to the lease to Entity A
• parties agree that the sale of the property is to be a GST-free supply of a going concern, and
• the vendor will carry on the enterprise until completion date.
The purchaser Entity B is registered for GST.
The contract sets out that the sale price is $X and the settlement date is mmyyyy
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 38-325