In December 2012 over 30 private rulings dealing with GST issues were published on the Private Rulings Register.

Discussion of select rulings

Authorisation number: 1012207204466 – sale of land by statutory trustee

This ruling deals with the GST treatment of a sale of real property by a statutory trustee who has been appointed for the purpose of selling real estate which is the subject of a dispute.

The Court Order provides that the real property vests in the applicant as trustee on statutory trust for sale. Prior to the order, the property was jointly owned by the applicants and the respondent to the proceedings – they are now beneficiaries of the trust under the order. The trustee does not have a tax file number nor an ABN and is not registered for GST.

The ruling concludes that the trustee is not required to register as the trustee’s actions do not amount to the carrying on of an enterprise in relation to the property, but rather the trustee is merely acting in accordance with the Court Order to dispose of the property.

The ruling also considers that the trustee does not make a taxable supply when the property is sold.

This is an interesting ruling, and can be compared with Private Ruling No.1012201810746 which dealt with the question of whether GST was payable on executors commission to be received by an executor appointed to administer an estate. The Private Ruling found that GST was payable because the executor was carrying on an enterprise and GST was payable. It could be argued that the role of executor and statutory trustee are similar – the executor is acting in accordance with the Grant of Probate (an order of the Court) to discharge the obligations under the Will.

Authorisation number: 1012327608442 – where leased commercial land is a going concern

This ruling deals with the GST treatment of 3 parcels of commercial land acquired by the applicant, and whether those parcels were taxable or GST-free. Parcel A was leased by the vendor to a third party and the lease continued at settlement. Parcel B was subject to an existing lease by the vendor to the purchaser. Parcel C was vacant land which was previously leased but was not marketed for lease at settlement.

The ruling took the following view:

• Parcel A was GST-free as the sale of a going concern because the enterprise of leasing was conducted to the date of settlement
• Parcel B was taxable because the lease ceased on settlement and therefore the vendor did not supply all the things necessary for the continued operation of the leasing enterprise
• Parcel C was taxable because the vendor was conducting an enterprise of making the land available for profit

Taxable supplies

• GST and medical services – whether invoices received from local medical clinics from services provided by visiting medical doctors to public inpatients under a contract with a public hospital are taxable

Creditable acquisition

• GST and payments covered by an appropriation – whether the applicant (state government) makes a creditable acquisition when it provides funding to a local government body for the administration of an approved program

GST-free

• GST and supply of professional course – whether supply by an approved provider of professional courses for registered individuals of a specific profession are GST-free or taxable
• GST and international services – whether the applicant, a consultant who entered into an agreement with non-resident X to support and assist X in the organisation of its commercial agency set-up in Australia, is required to register for GST and is making taxable supplies or GST-free supplies
• GST and international services – whether the applicant who provides advice and information to a foreign company in relation to customer prospects or inquiries is making taxable or GST-free supplies
• GST and supply of consulting services – whether GST payable on the supply of consulting services via the internet to a non-resident company
• GST and supply of services to overseas students – whether the supply of services to overseas students under an agreement with an RTO is a taxable supply

Financial supplies

• GST and financial supplies – whether the supply by A of a loan which incorporates a repayment mechanism for the final instalment constitutes solely a financial supply in accordance with s 40-5 of the GST Act

Real Property

• GST and the divestment of a forestry enterprise – whether the supply of freehold properties (other then residential property) a GST-free supply of farmland – whether the supply of residential property input taxed – whether the supply of share capital input taxed – whether the supply of interests in leases a going concern
• GST, the supply of accommodation and impact on registration requirements – whether required to register for GST where plans to operate guest house accommodation – whether supplies will be input taxed as residential premises
• GST registration and sale of property – whether applicant appointed as statutory trustee for the purpose of selling real estate the subject of a dispute is required to register for GST – whether the trustee makes a taxable supply when the real estate is sold
• GST and sale of farmland – whether the sale of farmland used for agistment is GST-free
• GST and the sale of commercial property – whether the sale of commercial property partly taxable and party GST-free as a going concern, where area A was leased by a third party from the vendor, Area B was leased by the purchaser and area C was vacant land that was previously leased but not marketed as a lease
• GST and sale of property – whether GST payable on sale of property where bought for the purpose of residential subdivision and sale but before subdivision entered into option agreement with purchaser who will subdivide and sell the property but the vendor will obtain the development approval – whether GST free as the supply of a going concern – whether the enterprise of property development had commenced
• Going concern and the requirement to register for GST – whether the sale of commercial premises can be the supply of a going concern by a vendor who is neither registered nor requirement to register for GST
• GST and sale of property – whether the assignment of leases of residential premises input taxed as the sale of residential premises
• GST and sale of properties – whether GST payable on the sale of a number of adjoining properties to a builder which were acquired for the purpose of carrying out a development project and rented out to individuals pending development approval – where buildings have not been altered but DA approval has been granted – whether the sale of the properties is input axed as the supply of residential premises

Refunds of GST

• Refund of GST – whether the Commissioner will exercise discretion in s 105-65 of Schedule 1 to the TAA to refund overpaid GST where GST incorrectly paid on GST-exempt disbursements recovered from clients – whether GST passed on to clients