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Edited version of private advice
Authorisation Number: 1051789096641
Date of advice: 20 January 2021
Ruling
Subject: Goods and services tax and property
Question
Is the sale of the Property by Person A, Person B and Person C as the Executors of the deceased estates of Person D and Person E (You) a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No.
The requirements for making a taxable supply include that the supply is made in the course or furtherance of an enterprise that you carry on and that you are registered or required to be registered for GST.
We consider that you are not carrying on an 'enterprise' as defined in section 9-20 of the GST Act in regard to your sale of the Property in realising the estate assets of Person D and Person E. In addition, you are not registered nor required to be registered for GST in regard to your sale of the Property.
As all the requirements of section 9-5 of the GST Act are not satisfied, you will not be making a taxable supply when you sell the Property and it will not be subject to GST.
Relevant facts and circumstances
Person A, Person B and Person C (collectively, You) are the Executors of the deceased estates of Person D and Person E. Person A, Person B and Person C are also the beneficiaries.
Person D passed away on ddmmyyyy and Person E passed away on ddmmyyyy.
On ddmmyyyy you were granted Probate of the Will for Person D.
On ddmmyyyy you were granted Probate of the Will for Person E.
On ddmmyyyy a tax file number registration was established for the deceased estate of Person D (The Trustee For Person D Estate).
On ddmmyyyy a tax file number registration was established for the deceased estate of Person E (The Trustee For Person E Estate).
The Executors for the Estate of Person D and the Executors for the Estate of Person E are not registered for GST.
You are selling the Property in the process of realising the estate assets of Person D and Person E.
The Property was purchased on ddmmyyyy by Person D and Person E. Person D and Person E have never been registered for GST.
The Property contains a primary residence, caretaker residence, farm sheds, dam area and farm on Xha. You have provided an aerial photo of the Property.
The Property was used by Person D and Person E as their principal place of residence and farm. No farming enterprise was carried on. A section of the land was rented cheaply for private agistment. The caretaker residence was rented from time to time.
The Property has remained vacant since ddmmyyyy and has been maintained by Person C in the interim for insurance purposes.
You have provided the title for the Property outlining that you hold half the Property as personal representative under instrument X and half the Property as personal representative under instrument X as tenants in common. The Property has not been transferred to the beneficiaries and is held by the Executors for each deceased estate.
You obtained a valuation of the Property dated ddmmyyyy of $X. You have provided a copy of the valuation.
On ddmmyyyy you entered into a Call Option Deed for the Property with Entity A (the Deed) for the purchase price of $X. You have provided a copy of the Deed.
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 9-20
A New Tax System (Goods and Services Tax Act 1999 Section 9-40