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ARTICLE · 03 MARCH 2010

ATO ruling that developer of 22 lot subdivision does not have to register for GST

Cooper Grace Ward
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A private ruling from the ATO in relation to a substantial land subdivision found the project did not constitute an enterprise and was the realisation of a capital asset

AustraliaTax
Greg Cahill
Greg Cahill
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ATO determines that developer of 22 lot subdivision does not have to register for GST

Cooper Grace Ward has recently received a favourable private ruling from the ATO in relation to a substantial land subdivision.

The client owns 52 acres of residential land and intends to subdivide the property into 22 allotments.

The ATO ruled that:

  • the project did not constitute an enterprise; and
  • the client will not have to pay GST on the sale proceeds.

In making its decision, the ATO was clearly influenced by Miscellaneous Taxation Ruling MT2006/1 and cases such as Statham and Anor v Federal Commissioner of Taxation and Casimaty v Federal Commissioner of Taxation in relation to whether the taxpayer's activities amounted to the carrying on of a profit making undertaking or was only the mere realisation of a capital asset.

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