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This edited version has been archived due to the length of time since original publication.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: 1051373234602

Date of advice: 19 July 2018

Ruling

Subject: Supply of going concern

Question

Do your leasing activities meet the conditions required for the transaction to be a sale of going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

Based on the information supplied to us, you meet all the requirements of section 38-325 of the GST Act, including that, 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.

Additionally, there is a clause in the sale contract indicating that you and the Purchaser have agreed in writing that if the sale is the supply of a going concern that on the day of the supply (settlement date), you will be:

    ● supplying all of the things that are necessary for the continued operation of the current enterprise, inclusive of the Property and assignment of the lease as lessor

    ● supplying to a Purchaser that is, or prior to settlement will be registered GST

    ● making the supply for agreed consideration

    ● supplying under a contract that confirms the sale is a supply of a going concern, and

    ● having carried on the enterprise until the day of the supply.

This ruling applies for the following periods:

1 July 20XX to 30 June 20XX

1 July 20XX to 30 June 20XX

The scheme commences on:

XX XXXXX 20XX

Relevant facts and circumstances

The Vendor owns a commercial property for sale.

The Vendor is registered for Goods and Services tax (GST).

The Purchaser is X and or Y.

There is an existing XX year lease in place and it is currently leased to Z and will continue to do so under the current lease agreement.

Z will continue to pay rent accordingly while the premises are vacated.

You intend to keep the enterprise of operating the lease until the date of settlement when it will be assigned to the Purchaser to continue as lessor.

The sale contract will record that the sale is of a going concern and both the seller and the purchaser will agree it is a sale of a going concern.

The purchaser will be, or will be required to be, registered for GST.

The sale will be deemed as a sale of a going concern as a result of a requested private ruling:

    ● if the particulars of sale specify that the supply made under this contract is a 'going concern':

    ● the parties agree that this contract is for the supply of a going concern; and

    ● the purchaser warrants that the purchaser is, or prior to settlement will be, registered for GST;

    ● the vendor warrants that the vendor will carry on the going concern until the date of supply and,

    ● Purchaser must provide to the Vendor written proof of registration for GST not less than 24 hours prior to the settlement date.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 38-325


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