Commentary

V3.226 Sales in satisfaction of a debt

Part V3 Supplies, acquisitions and imports

V3.226 Sales in satisfaction of a debt

V3.226 Sales in satisfaction of a debt

Where goods forming part of the assets of a taxable person (T) are sold by another person (X) under any power exercisable by X in or towards satisfaction of a debt owed by T, the goods are deemed to be supplied by T in the course or furtherance of his business1. This avoids a charge to tax on T under the provisions described in V3.211.

The foregoing provision has effect in relation to land forming part of the assets of a business as if it were goods forming part of those assets2. Thus, if

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