- TOGCs involving property require extra care: Beyond standard TOGC conditions, property transfers must meet two additional requirements — the buyer must opt to tax (OTT) and confirm the anti-avoidance rule won’t apply — both before the “relevant date” to avoid VAT charges.
- Defining a ‘property rental business’ is key: HMRC distinguishes between asset sales and business transfers. A valid TOGC must involve an ongoing rental business, typically evidenced by existing leases or contractual arrangements that continue post-transfer.
- Nominee and tenant purchases pose challenges: Transfers to tenants or through nominee structures often fail TOGC tests unless carefully planned. Immediate consecutive transfers and lack of economic activity can disqualify TOGC treatment, triggering VAT and SDLT implications.
Source cjmtax
See also
- VTOGC6050 – Land and property: Land and property – general – HMRC internal manual – GOV.UK
- HMRC Guidance: Transfer a business as a going concern (VAT Notice 700/9) – VATupdate
- HMRC Internal Manual: VAT Transfer of a Going Concern – VATupdate
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