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Glossary

Going concern (GST-free)

Also called: supply of a going concern

A supply of a going concern is a sale of a business, including a leased commercial property, that can be GST-free if the conditions set by the ATO are met, such as both parties being registered and agreeing in writing.

An example

A buyer purchases a fully leased shop. The contract states it is the supply of a going concern, so if the conditions are met no GST is charged on the price.

Why it matters

Whether GST applies changes the funds a buyer needs at settlement and how a lender sizes a loan. If the conditions are not met, GST may become payable, so the contract terms and advice matter.

Points to check

Both buyer and seller must meet the conditions for a GST-free going concern sale, and the contract should state it clearly. If the conditions are not met, GST may be payable, which changes the funds needed at settlement. Check the leases, tenancies and operating records that form part of the sale. Get tax advice before signing, and make sure your lender knows how GST is being treated.

Related terms

Further reading: Australian Taxation Office