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Edited version of your written advice
Authorisation Number: 1012832113096
Date of advice: 30 June 2015
Ruling
Subject: GST and the sale of various properties
Issue
Are the supplies of the 10 Properties by the an Australian entity (you) to the various Purchasers a GST free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Properties 1-8
Yes. Your supplies of the properties 1-8 will be GST-free supplies of a going concern under section 38-325 of the GST Act.
Based on the information provided, on the settlement date you will be supplying to the Purchasers all of the things that are necessary for the continued operation of each leasing enterprise, being the Property and the ongoing XYZ Lease agreement.
Furthermore, under the contract, you will continue the enterprise of leasing the properties to XYZ Limited as the tenant until the sale date of the settlement. These leases will be assigned to the Purchasers before the completion date. Therefore, you will be carrying on the various leasing enterprises until the day of the supply to the Purchasers.
In addition, the Purchasers are registered for GST and you and the Purchasers have agreed in writing that the sale is a supply of a going concern.
Accordingly, your supply of each leasing enterprise to the Purchaser meets the requirements of a GST-free supply of going concern for the purposes of section 38-325 of the GST Act.
Properties 9 & 10
The supply of properties 9 & 10 will be GST-free provided the Purchasers are registered for GST by the settlement date.
Relevant facts
You are an Australian entity which is registered for GST.
You have entered into contracts to sell the X properties in Australia.
The property 1-8
Under the contract, you and the purchaser agreed that the sale of the property is a GST-free supply of a going concern.
Under the contract, the properties are sold subject to the XYZ Limited lease.
You will continue the enterprise of leasing the properties to XYZ Limited as a Lessee until the date of the settlement. The lease will be assigned to the Purchasers before the completion date.
Under the contract, the new lease has been entered into before completion of the contract between you as a lessor and XYZ Limited as a lessee.
The Purchasers are registered for GST.
The property 9 & 10
Under the contract, you and the purchaser agreed that the sale of the property is a GST-free supply of a going concern.
Under the contract, the properties are sold subject to the XYZ lease.
You will continue the enterprise of leasing the property to XYX Limited as a Lessee until the date of the settlement. The lease will be assigned to the Purchasers before the completion date.
Under the contract, the new lease has been entered into before completion of the contract between you as a lessor and XYZ Limited as a lessee.
The Purchasers have an Australian Business Number (ABN) and applied to register for GST registration. However our record shows that the Purchasers are not yet registered for GST.
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