If you are able to meet all of the above requirements, your sale should be an ongoing business and there will be no GST to pay. Benefits of transferring property as a continuation business The Australian Taxation Office (ATO) recently recognised, at a meeting of the GST sub-group of the National Tax Liaison Group, that the supply of a partially constructed building, subject to lease agreements with third parties, could be a supply of a current business for GST purposes. However, the ATO has not set out this change in a document that is publicly binding on the Commissioner. A «Going Concern» is an invention of the Australian Tax Office («ATO») that allows the sale of a business to be a transaction without GST. It is always very desirable for buyers and sellers when selling businesses – this does not mean GST, and it gives both parties the certainty of what they pay and what they receive. However, there are many sales rules and requirements for being a GST-free business that must be taken into account before entering into a sales contract. GST is often the last thing you think about when negotiating the sale or purchase of a business. Whether the price you have negotiated, GST included or exclusive, can be easily forgotten in the excitement, or both parties will simply consider commercial sales to be GST-free, without considering all the elements of a «Going Concern». The most common situation is when the owner of the property or estate or his interest in a property currently leased to tenants sells or expropriates and the benefit of the lease or leases is transferred to the buyer. It is not necessary to rent the entire property, the seller can occupy part of the premises himself or part of it can be empty. The handover of the building with the tenants remains a TOGC. In the absence of lease agreements or formal and written agreements, no lease agreement is applicable and no lease can be assigned to the buyer.
Any party can leave at any time. Your business consists of leasing a commercial property and a significant part of that business would be a lease agreement or a formal written agreement. Without it, it would be difficult to satisfy the number 4. above «the seller provides all the things necessary for the continued operation of the business». The parties should ensure that they keep all relevant documents where it is necessary for them to prove their right to zero VAT on turnover. For example, when selling a leasing company, SARS may require proof of the lease with a third party. It is not uncommon for a developer (developer A) to want to sell a partially constructed building to another developer (developer B). If Developer A has notified a tenant for the new building, the parties may wish to treat the sale as the delivery of an ongoing group for GST purposes. This ensures that no GST has to be paid on the sale and reduces stamp duty. For a delivery to be a GST-free delivery of a «Going Concern»: some essential aspects of a Going Concern sale are: if you want to sell a partially constructed building and you have entered into lease agreements with third parties for that building, you can accept that the delivery is a GST-free delivery from a current group.
provided that all the provisions of paragraphs 38 to 325 of the GST Act are complied with (see above). . . .