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ARTICLE · 07 AUGUST 2009

When Is A Small Land Developer Carrying On An “Enterprise”?

Cooper Grace Ward
Cooper Grace Ward
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We published a legal alert written on 28 October 2008 titled “Small Land Developers Can Have Their Cake and Eat It Too”.

AustraliaTax
Greg Cahill
Greg Cahill
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We published a legal alert written on 28 October 2008 titled " Small Land Developers Can Have Their Cake and Eat It Too".

In this alert we reported on a Cooper Grace Ward client who had received determinations from the ATO that the development of their residential acreage into 36 allotments:

  • was the mere realisation of a capital asset (which meant the profits were exempt from tax); and
  • did not amount to carrying on an enterprise (which meant they did not have to pay GST on sales).

In making their decision on the GST issue, the ATO was clearly influenced by the position they had adopted in Miscellaneous Taxation Ruling MT 2006/1, that a project that is no more than the mere realisation of a capital asset will not be an enterprise for GST purposes.

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