Tribunal finds supply made on settlement of real estate contract, not execution – The Trustee for Naidu Family Trust and Commissioner of Taxation [2011] AATA 909

On 19 December 2011 the Tribunal handed down its decision in The Trustee for Naidu Family Trust and Commissioner of Taxation [2011] AATA 909.

The vendor had executed a contract of sale for real property but the sale was subsequently completed by the agent of the mortgagee in possession who executed the transfer and completed settlement.  The applicant, the agent of the mortgagee in possession, contended that the supply took place on execution of the contract and that the vendor was liable for the GST on the sale, not the mortgagee in possession pursuant to s 105-5 of the GST Act.  Not surprisingly, the Tribunal applied the reasoning of Gordon J in Central Equity Limited v Commissioner of Taxation [2011] FCA 908 (I should note that the taxpayer has appealed that decision to the Full Federal Court) and found that the taxable supply occurred at settlement and the GST liability fell to the mortgagee in possession.

 

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