Ian Mark Collins & Mieneke Mianno Collins ATF The Collins Retirement Fund and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered a dispute between Ian Mark Collins and Mieneke Mianno Collins, as trustees of The Collins Retirement Fund (the applicants), and the Commissioner of Taxation. The core of the dispute concerned whether the applicants were required to be registered for Goods and Services Tax (GST) at the time they subdivided and sold eleven lots of land. The Commissioner had issued assessments for net amounts for specific tax periods, asserting that the sales were subject to GST calculated under the margin scheme, which the applicants had objected to.

The Tribunal was required to determine whether the applicants' GST turnover met the registration threshold, thereby obliging them to be registered for GST. Specifically, the Tribunal had to consider whether the sales of the subdivided lots were excluded from the calculation of turnover for registration purposes, either as sales of capital assets or as a consequence of ceasing to carry on or substantially and permanently reducing the size or scale of an enterprise. The Tribunal also had to consider the relevance of income tax jurisprudence concerning the capital versus revenue distinction to the application of section 188-25 of the GST Act, which had not previously been subject to judicial consideration.

The Tribunal found that the applicants' subjective intention regarding the subdivision and sale of the lots was outweighed by objective evidence. This evidence included a quote obtained by Mr. Collins for subdivision planning and related services six months before the land was transferred to the applicant fund, which suggested that subdivision and sale for profit was at least a significant purpose at that time. The Tribunal noted that for GST purposes, an enterprise includes a series of activities done in the form of a business or an adventure or concern in the nature of trade, and that a trustee of a complying superannuation fund is taken to carry on an enterprise. The Tribunal concluded that the sales were not excluded from the turnover threshold under section 188-25(b) and that the applicants' GST turnover met the registration threshold.