Q&As

An investment property is being sold as a transfer of a going concern (TOGC). There are both freehold and long leasehold interests which are being transferred to a single buyer. The occupational leases (and hence the income stream) are granted out of the long leasehold. The intention is to merge the long leasehold with the freehold upon completion of the purchase. Does this affect the TOGC status, ie because the interest out of which the occupational leases are granted will come to an end (albeit the rental income to the buyer continues, as the buyer will become landlord of the occupational leases by virtue of its freehold interest, rather than under the long leasehold interest)?

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Published by a LexisNexis Tax expert
Published on: 10 October 2022
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For the purposes of the below response we have only considered the transfer of a going concern (TOGC) condition at Value Added Tax (Special Provisions) Order 1995, SI 1995/1268, reg 5(1)(a)(i) that the assets of the business transferred ‘are to be used by the transferee, in carrying on the same kind of business…as that carried on by the transferor’. We assume you have considered (and are comfortable

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United Kingdom

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