Commentary

V3.211 Transfer or disposition of goods

Part V3 Supplies, acquisitions and imports

V3.211 Transfer or disposition of goods

Supplies made without consideration

V3.211 Transfer or disposition of goods

The charge to tax

A supply of goods is deemed to be made if:

  1.  

    (1)     goods forming part of the assets of a business are transferred or disposed of so as no longer to form part of those assets1

  2.  

    (2)     a grant or assignment is made of any interest in, right over or licence to occupy land forming part of the assets of a business so that it no longer forms part of those assets2

  3.  

    (3)     with effect from 1 January 2020, a 'relevant event' occurs in relation to a movement of call-off stock (see V3.213A) within 12 months of the arrival of the goods, or the goods are not transferred to the customer and no relevant event takes place within that period3

However, a grant or assignment only falls within head 2 above if4:

  1.  

    •     it is the grant/assignment of a major interest, or

  2.  

    •     it is made otherwise than for a consideration

If it does not meet these tests, it is regarded as a supply of services (for which see V3.212).

This provision is derived from arts 16 and 18 of Directive 2006/112/EC5. This states that a supply of goods takes place where the assets of a business are:

  1.  

    •     applied for the private use of the taxpayer or his staff

  2.  

    •     disposed of free of charge, or

  3.  

    •     applied for purposes other than those of the business

Since these circumstances are disjunctive, it follows that a taxable supply takes place

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