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VAT - TOGC or not?

VAT - TOGC or not?

Commerical premises being purchased.

Current owner is SSAS renting property under lease arrangements to its sponsoring company.

Sponsoring company relocating as part of sale.

Purchaser is trading company (75%) and SSAS to which it is sponsoring company (25%).

Purchasing SSAS to rent it's share of property in entirety to trading company.

Trading company to utilise circa 50% of property for own trade and sub-let the surplus to 3rd parties.

SSAS now VAT registered and the property opted to tax, sponsoring company a named partner on VAT partnership application.

Sponsoring company also opted to tax on property.

Are there 2 transactions for VAT recovery on purchase, 75% to sponsoring company, and 25% to SSAS.

Can the sale qualify under the TOGC conditions, in full, or in part?

Would purchasing sponsoring company need to be in place as tenant of current owner prior to the sale?

Many thanks for taking the time to look, and (hopefully) answer.


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22nd Feb 2016 20:41


This seems possible, as there appears to be a continuing business of property rental. The purchasing party (in both cases) does have to opt to tax, and complete the anti-avoidance confirmation in good time. And you will need to check the checklist in PN 700/9, chapter 6. It may mean, if one purchaser is not continuing a property rental business, then the TOGC rules will not apply. Whether it can recover the input tax is a separate matter.

(But, as usual, have a specialist look at the documentation.)

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