Transfer of going concern

The Royal College of Paediatrics and Child Health (RCPCH) decided to buy new premises from Coleridge a property development company. The British Association of Perinatal Medicine (BAPM) which rented space from the college wished to move to the new premises as a tenant.

It was decided to make the sale VAT-efficient by arranging it as a transfer of a going concern to which end Coleridge and BAPM entered into an agreement for a lease for a single room conditional on the property developer exchanging an unconditional sales contract with RCPCH.

HMRC said VAT was due because the deal did not amount to a transfer of a going concern.

The First-tier Tribunal allowed the taxpayer’s appeal holding there was a transfer of a going concern of a property business and finding the Revenue’s assessment was time-barred.

The tax department appealed.

Mr Justice Birss in the...