Relevant Requirements
Scenario:
Section 38-480 refers to the land in question being land on which a farming business has been carried on at least five years preceding the supply. My question is, what is the situation if the farming business is not being carried on supply even though the property has been a farm for a period longer than five years? It is a large-scale farming property in the Northern Territory that has been subdivided into smaller areas. The patriarch of my family was the decision-maker for our farming business and the subdivision proposal, who died unexpectedly about 18 months ago and after that, the primary introduction business has not been actively pursued since shortly before the patriarch’s death.
Explanation:
The requirements for both GST-free supply of farmland under s 38-480 and GST-free supply of a going concern under s 38-325 require the farming business and the enterprise to be carried on up to and including the date of supply, so this sale cannot proceed as a GST-free supply. However, there will have a short-term cash flow disadvantage if the sale is a taxable supply since the GST paid could be claimed as an input tax credit when the purchaser submitted their next BAS.