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Edited version of private advice
Authorisation Number: 1051864771805
Date of advice: 9 July 2021
Ruling
Subject: GST and the supply of a leasing going concern
Question
Did you, entity name, make a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 when you sold the Property to Company A?
Answer
Yes. Your sale of the Property to Company A under the Contract of Sale, which was sold subject to the Lease with Company B, is a supply of a going concern that is GST-free. GST is not payable on the sale.
Relevant facts and circumstances
You, entity name carry on a business of business description in Australia. You are currently registered for GST and have been since date.
You were the registered proprietor of land situated at address, being land described in title reference (the Land). The Land was subdivided into lots on date. Since date the Land has largely remain unused.
On date you entered into a contract with Company A to sell to one of the lots (the Contract of Sale), being the land on title reference (the Property). You have retained Lots 2 and 3. You provided a copy of the Contract of Sale and other relevant contractual documentation relating to the sale.
On date you entered into discussions with Company B to lease the Property to it.
On date you formally entered into a lease of the Property with Company B, being before the date of settlement under the Contract of Sale with Company A (the Lease). You provided a copy of the Lease and other relevant contractual documentation relating to the Lease.
Settlement of the sale of the Property took place on date. The Property was transferred to Company A subject to the Lease on this date. Company B continues to have legal possession of the Property under the terms of the Lease, with Company A now being the landlord of the Property and receiving the rents payable to the landlord under the Lease.
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
A New Tax System (Goods and services Tax) Act 1999 section 38-325