- The General Court in A&P Deco held that granting a new VAT-exempt lease over buildings is not part of a transfer of a business as a going concern (TOGC).
- Because the buildings had been capital goods scheme (CGS) items, the exempt lease triggered a CGS adjustment: input VAT previously recovered had to be revised due to the change from taxable to exempt use.
- The court said only assets already part of the business can be transferred in a TOGC; a newly granted lease cannot be treated as one of those transferred assets.
- The decision may cast doubt on the reasoning in Robinson Family Ltd, where a lease for a premium with only a nominal reversion was treated as a TOGC of a letting business, though the cases are distinguishable on their facts.
Source: simmons-simmons.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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