VAT transfer of going concern

VAT transfer of going concern

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Hi folks,

I have a client selling their property rental business as a going concern (essentially part of a "forced" sale by fixed charge receivers). The land and property has an option to tax. The purchaser has registered for VAT and exercised the option on the land so that there will be taxable supplies on the land/property (i.e. VAT charged on rents) once ownership has transferred. All of the conditions are met for the sale to be treated as a ToGC so no VAT needs to be charged.

My questions relate to my client who are the sellers. Once the property is sold, the company has no assets and ceases to trade. I assume the company simply completes VAT 7 to de-register and states on the form that they have sold their business under ToGC rules?

Also, what details should they put on the invoice for the sale of the property business with no VAT? Would narrative along the lines of "Sale of property rental business including existing tenancies at property address" be sufficient?  Then the net price is stated and with VAT at 0%?  Should the invoice say something like "No VAT is charged on the basis that the property business is transferred as a going concern under section 94 VAT Act 1994"??

All help greatly appreciated folks.

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By The VAT Doctor
27th Oct 2014 23:20

No need

There is no specific need to issue an invoice as there is no taxable supply being made.  One would usually see the solicitors preparing a completion statement only.

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