• Legal database
Legal database
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This edited version has been archived due to the length of time since original publication.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: 1012789922412

Ruling

Subject: GST and supply of real property

Question

Will you make a creditable acquisition under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in relation to the purchase of the vacant land located in Australia (the Property)?

Answer

No

Relevant facts and circumstances

    • You are registered for goods and services tax (GST).

    • The registered owner of the Property (the Vendor) granted you an option to purchase the Property.

    • The Vendor and you have entered into a call option agreement.

    • The Vendor has applied to the Tax Office for a private ruling on whether the supply of the interest in the Property to you is a taxable supply under the GST Act.

    • Earlier, the Tax Office issued a private ruling to the Vendor and ruled that the supply of the Property to you will not be a taxable supply under section GST 9-5 of the GST Act.

Relevant legislative provisions

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

Subsection 7-1(2)

Section 11-5

Reasons for decision

Under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), an entity makes a creditable acquisition when all of the requirements in the section are met. One of the requirements is that the supply to the recipient is a taxable supply

The Tax Office issued a private ruling to the Vendor and ruled that the supply of the Property to you will not be a taxable supply under section 9-5 of the GST Act. Therefore, you will not make a creditable acquisition of the Property.

Section 7-1 of the GST Act provides that entitlements to an input tax credit arise on creditable acquisition. It follows that you are not entitled to any input tax credit on the acquisition of the Property.


Back to top