Q&As

Can there be a transfer of a going concern when a property letting business is transferred to a new landlord which is VAT grouped with the sole tenant? How does this fit with the requirement in HMRC guidance for supplies to be made outside the group?

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Published on LexisPSL on 05/11/2020

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Can there be a transfer of a going concern when a property letting business is transferred to a new landlord which is VAT grouped with the sole tenant? How does this fit with the requirement in HMRC guidance for supplies to be made outside the group?

There are a number of conditions that must be met for a sale of a property letting business to be a transfer of a going concern (TOGC). One of these conditions is that the buyer (the new landlord) must use the assets transferred (the property) in carrying on the same kind of business as that carried on by the seller.

Historically, HMRC took the view that carrying out transactions within a VAT group did not amount to a business for TOGC purposes. This meant that there could not be a TOGC on a property sale where the buyer was VAT grouped with the sole tenant, because the property l

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