VAT—transfers of a going concern involving land and buildings
Produced in partnership with Martin Scammell
VAT—transfers of a going concern involving land and buildings

The following Tax guidance note Produced in partnership with Martin Scammell provides comprehensive and up to date legal information covering:

  • VAT—transfers of a going concern involving land and buildings
  • Additional conditions for a TOGC involving property
  • The Article 5(2B) notification
  • Is there a transfer?
  • Is there a transfer of a business?
  • Intention to continue the business
  • The registration condition
  • Separate operation
  • Consequences of TOGC treatment

This Practice Note is about the issues that arise on a transfer of a going concern involving land and buildings.

A transfer of a going concern (TOGC) has two distinct meanings for VAT purposes:

  1. an ordinary meaning, referring simply to the disposal of an ongoing business—this is relevant, in particular, to the VAT registration position of the buyer, and

  2. a transfer that is treated as a non-supply for VAT purposes, so that in particular no VAT is due on it

Both are often referred to as a TOGC, but for the remainder of this Practice Note this term is reserved for the second of these meanings, to refer to a non-supply.

There are three main ways in which property might be the subject of, or included in, a TOGC:

  1. a transfer of a non-property business where property is simply among the assets being transferred—an example might be the sale of a retail business or restaurant

  2. a transfer of an investment property—a business of property letting, or

  3. a transfer of a property development activity, such as the sale of an uncompleted development

This Practice Note is about specific issues that arise where, and to the extent that, the transfer involves land and buildings. These issues arise both from the relevant VAT law and from the nature of property and property transactions.

The property-specific issues should be considered