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1 Do the activities proposed in the business plan meet the definition of 'farming business' under section 38-475(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

1 Yes. This ruling applies for the following: DDMMYYYY to DDMMYYYY The scheme commenced on: DDMMYYYY

You are not currently registered under an ABN, or for goods and services tax (GST). You contracted to acquire a freehold interest in vacant land. The land includes a water licence. On the sale contract, the 'Farm Land' box is checked, indicating the sale of the land is a GST-free supply of farmland. The seller warrants they have carried out a farming business for at least five (5) consecutive years immediately preceding the signing of the contract. The buyer warrants they intend to continue to conduct a farming business on the property after settlement. You have provided a business plan outlining proposed cattle breeding operations on the land after acquisition.

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-475 A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-480

In this reasoning, unless otherwise stated, •                     all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), •                     all legislative terms of the GST Act marked with an asterisk are defined in section 195-1 of the GST Act. Section 38-480 of the GST Act states that the supply of a freehold interest in land is GST-free if: (a)          the land is land on which a *farming business has been *carried on for at least the period of 5 years preceding the supply on that land; and (b)          the *recipient of the supply intends that a farming business be carried on, on the land. You have contracted to acquire a freehold interest in vacant land. You have provided a copy of your business plan as evidence of your intended operations on the land after acquisition. Under section 38-475(2) of the GST Act an entity carries on a farming business if, among other things, it carries on a business of maintaining animals for the purpose of selling them or their bodily produce (including natural increase).

Agistment of animals alone does not satisfy the definition of a farming business. Maintaining and expanding a cattle herd for the purpose of selling them and their natural increase meets the definition of a farming business under subsection 38-475(2) GST Act. Your business plan demonstrates sufficient intention to undertake activities which meet the definition of a farming business under section 38-475(2) of the GST Act, which therefore satisfies the requirements of section 38-480(2) of the GST Act.