1 Will the proposed sale of vacant land known as [the Property] and located at [address], be subject to goods and services tax (GST) pursuant to section 9-40 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
No. The sale is not in furtherance of an enterprise or a commercial transaction but is the mere realisation of a capital asset. Question 2 Will the proposed sale of vacant land known as [the Property] and located at [address], be subject to capital gains tax (CGT) pursuant to section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997) and assessable as statutory income under section 102-5 of the ITAA 1997? Answer Yes. The sale will trigger CGT event A1 as the realisation of a capital asset. This ruling applies for the following period : [the relevant period] The scheme commences on: [the date this ruling issues]
In [the relevant year], [Company A] as trustee for [Trust A] and [Company B] as trustee for [Trust B] ('You') jointly purchased a vacant [relevant measurement] parcel of land known as [property title description] and located at [address] (the Property). At the time of purchasing the vacant land your intention was to hold it as an investment asset for its long-term capital growth. You have no other assets and have not previously acquired vacant land as speculation or engaged in land banking. You are not registered for GST. The directors of [Company A] and [Company B] (the trustee companies) are the principal beneficiaries of the respective trusts. Your trustees and beneficiaries have never directly, or indirectly (through control of other entities), carried on any land development business or undertaken any land development activities. You are considering entering into a contract to sell the vacant land. The land has not been subdivided, developed, or used to generate income. The land is unimproved, and no activities have been undertaken to increase the value of the land.
You have incurred associated costs in connection with the purchase and holding of the vacant land, and you will incur any selling costs.
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 A New Tax System (Goods and Services Tax) Act 1999 section 9-40 A New Tax System (Goods and Services Tax) Act 1999 section 23-5 A New Tax System (Goods and Services Tax) Act 1999 section 188-25 Income Tax Assessment Act 1997 section 6-5 Income Tax Assessment Act 1997 subsection 6-5(2) Income Tax Assessment Act 1997 section 6-10 Income Tax Assessment Act 1997 section 102-5 Income Tax Assessment Act 1997 section 104-10 Income Tax Assessment Act 1997 section 108-5 Income Tax Assessment Act 1997 section 995-1 Issue 1 Goods and services tax on sale of vacant land. Question 1 Taxable supply Section 9-40 provides that goods and services tax (GST) is payable on any taxable supply that you make. You make a taxable supply when you satisf