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A recent decision of the Upper Tribunal considers the nature of a transfer of a going concern.
KEY POINTS
- TOGC treatment is available when a business is transferred and the purchaser intends to continue exploiting the assets transferred.
- A business is carried on when it provides goods or services internally that form an integral element of and directly contribute to external supplies.
- Fiscal neutrality requires that VAT groups be treated in the same way as a business organised in divisions within the same legal entity. This has wider repercussions.
- Transactions or divisional recharges point to the economic substance of a business being conducted not the label of external supplies.
- There may be opportunities to recover any sunk tax costs of VAT and stamp duty land tax.
Have you or a client recently bought or sold a business that carried VAT...
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