Q&As

What is the VAT treatment of an overage payment where the initial transaction was a transfer of a going concern?

read titleRead full title
Published on LexisPSL on 16/01/2019

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

  • What is the VAT treatment of an overage payment where the initial transaction was a transfer of a going concern?

This Q&A assumes that the subject matter of the transaction is land in the UK.

Overage describes the situation in which the seller retains the right to receive from the buyer an additional amount of consideration after the completion of the sale and payment of any initial consideration. This additional payment is generally dependent on the occurrence of certain future events.

For VAT purposes, overage is additional consideration for the sale of the land. It is therefore likely to have the same VAT treatment as the original consideration, unless there is a rule providing otherwise.

If the conditions for the transaction to be treated as a transfer of a going concern (TOGC) were

Related documents:

Popular documents