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One of my clients rents his commercial property to a florist business.
My client wants to sell the property and the tenant is also keen to retire from trading. However a potential buyer will only do a deal with my client and the florist if he can buy both the property and the business at the same time.
The advisers for the buyer said that VAT will not be chargeable on the property sale – although my client has opted to tax the building and always charged VAT on the rent – because the whole deal will qualify as a TOGC.
Is this correct? Or should the buyer have the property and trading assets in separate legal entities to achieve a TOGC outcome (ie rent is charged from a landlord to a tenant)?
What do readers think?
Query 20 070 – Flower power.
