Transfer of premises

By Tolley
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The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Transfer of premises
  • Fixtures
  • Transactions effected on and after 1 April 2012
  • Transactions effected prior to 1 April 2012
  • Section 198 claims - best practice
  • Industrial Buildings Allowances
  • Rollover relief
  • VAT
  • Stamp Duty Land Tax
  • A note on share sales

This guidance summarises the factors to take into account on the transfer of business premises as part of a trade and asset sale.

Fixtures

Buildings usually contain ‘fixtures’, ie items attached or placed permanently in the building. Examples include:

  • lifts
  • escalators, and
  • alarm systems

For guidance on 'integral features' see the Definition of plant and machinery guidance note.

Transactions effected on and after 1 April 2012

The rules introduced by FA 2012, Schedule 10 effectively remove the availability of a 'just and reasonable apportionment' of the purchase price of a commercial property and instead introduce a 'fixed value requirement'.

These rules apply where:

  • the current owner owns fixtures as a result of incurring capital expenditure for the purpose of a qualifying activity
  • the same fixtures were owned by another person, the past owner, “at a relevant earlier time”, as a result of incurring capital expenditure for the purpose of a qualifying activity
  • the past owner was not treated as owning the fixtures by virtue of the special rules for contribution allowances, and
  • the past owner was entitled to claim plant and machinery allowances in respect of the expenditure

CAA 2001, s 187A(1)

Where there is more than one past owner, the past owner that the legislation applies to is the most recent owner meeting the criteria.

These rules apply whether the past owner claimed capital allowances or not. The important question is whether the past owner could claim plant and machinery

More on Buying a company or trade: