Commentary

272 Liability to VAT on transfer of shares or assets

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

272 Liability to VAT on transfer of shares or assets

| Commentary

(b) VAT

272 Liability to VAT on transfer of shares or assets

A company reconstruction may involve the supply of goods (shares or business assets), usually by a VAT registered person. These supplies will not normally occur between members of the same VAT group and therefore the VAT treatment of such supplies needs to be considered. The position is different depending upon whether the transfer is of shares or of the assets of a business.

The transfer of shares under a company reconstruction is an exempt supply for VAT purposes1 and, as a result, any input tax incurred by the transferor which

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