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Edited version of your written advice
Authorisation Number: 1013058989586
Date of advice: 25 July 2016
Ruling
Subject: GST and the supply of real property as a GST-free going concern
Question 1
Is your supply of the Property to the Purchaser 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
Yes, your supply of the Property 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 things 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.
Question 2
Will Division 165 of the GST Act apply to your supply of the Property?
Answer
No.
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.
You, The Trustee for the Trust registered for GST. You acquired a property located in Australia.
After you acquired the Property you undertook various works including drainage and soil works, sewer design and dealt with various access issues.
On ddmmyyyy you entered into a Contract of Sale to sell the Property to the Purchaser. The Purchaser is registered for GST.
The Purchaser has nominated Entity A to take a lease of the Property prior to the sale. You have provided a copy of the Lease Contract.
Sale Contract
You have provided a copy of the Sale Contract. The relevant details are:
• The GST exclusive sale price is $X.
• The Purchaser takes title subject to the Lease.
• The Vendor and the Purchaser agree that the Property is sold as the supply of a going concern.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 9-5, and
A New Tax System (Goods and Services Tax) Act 1999 38-325.