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Edited version of private advice
Authorisation Number: 1051577399602
Date of advice: 10 September 2019
Ruling
Subject: GST
Questions
1. Will the supplies made by Entity A to Purchaser No.1 under the contract of sale and purchase of land (Contract) for Property X be 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)?
2. Will the supplies made by Entity A to Purchaser No.2 under the Contract for Property Y be a GST-free supply of a going concern under section 38-325 of the GST Act?
3. Was the Entity's supply of the Call Option under the Deed to Purchaser 1 to purchase Property X a GST-free supply under the GST Act?
4. Was the Entity's supply of the Call Option under the Deed to Purchaser 2 to purchase Property Y a GST-free supply under the GST Act?
Answers
1. Yes.
2. Yes.
3. Yes.
4. Yes.
This ruling applies for the specified period.
The scheme commences on the specified date.
Relevant facts and circumstances
· Entity A carries on a property development enterprise and is registered for the goods and services tax (GST).
· Entity A is the registered proprietor of real Property which includes Property X and Property Y.
· Entity A purchased the Property with the intention of developing the Property into multiple lots and apartments for sale.
· Entity A has been carrying out property development activities in relation to the development of the Property, continuously to date.
· Entity A has supplied a Call Option to Purchaser 1 to purchase Property X and a Call Option to Purchaser 2 to purchase Property Y.
· Under the terms of the relevant Call Option Deeds, the parties have agreed that upon exercise of the Call Option, Entity A will enter into an agreement (Sale Contract) with the purchaser, for the sale of the relevant Property, in consideration for payment of the specified price.
· Pursuant to the Sale Contract, Entity A will supply the purchaser with the relevant Property, and all the things (tangible and intangible) related to the property development enterprise at settlement date.
· Entity A continues to carry on the activities of the enterprise and will continue to operate the enterprise until settlement of the sale. At settlement, Entity A will provide the purchaser with all the things necessary to continue with the property development enterprise in respect of the Property.
· Entity A and the purchaser have agreed in writing that the supply is the supply of a going concern.
· The purchaser is registered for GST and will remain registered for GST at settlement date.
· Under the terms of the relevant Call Option Deeds, the parties have agreed that upon exercise of the Call Option, the supply made by Entity A will be the supply of a GST-free going concern.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 38-325