RCB/27/14 Changes relating to the transfer of a business as a going concern (TOGC)
Revenue & Customs Brief, Issue 27. July 2014
Purpose of this brief
This Brief explains a number of changes relating to the transfer of a business as a going concern (TOGC)—
— a change in HM Revenue & Customs' (HMRC's) policy on whether the surrender of a property lease can be a VAT-free TOGC;
— to clarify the scope of certain aspects of the policy change announced in RCB/30/12;
— to explain a change in policy concerning TOGCs of new residential and relevant charitable developments.
This Brief is for those who transfer their business as a going concern together with an interest in property.
To note the contents of this Brief and to treat future transactions accordingly.
For the purposes of this Brief all references to “surrender” of a lease include the renunciation of a lease in Scotland, all references to “assignment” of a lease include the assignation of a lease in Scotland and all references to a “reversion” retained by a transferor include the heritable title retained by the landlord in Scotland.
1 Surrender of a property lease
When the assets of a business (or part of a business) are transferred as a going concern no supply of those assets takes place for VAT purposes. There are certain conditions to be met for the transfer not to be treated as a supply for VAT purposes, among which is that the buyer must intend to use the assets to carry on the