GST Implications Of Property Transactions Through Bare Trusts And Inspecie Distributions By Trusts

The ATO has released two rulings which provide guidance on the GST implications of certain property transactions made through trust.

Taxation Ruling GSTR 2008/3 provides guidance in relation to the GST implications for the trustee and beneficiary in a bare trust arrangement. The ruling provides that where a property is held on bare trust and is later sold or leased to a third party, it is the entity carrying on the enterprise that makes the taxable supply and is thus subject to GST. Hence, where the trustee acquires a property that is held for a beneficiary that is carrying on an enterprise, there will be GST implications for the beneficiary rather than the trustee upon the acquisition, sale or lease of the property. The Ruling provides numerous examples, of which have been summarised in Appendix A below.