ARTICLE
30 October 2012

Sales Of Property Lettings Businesses: VAT Treatment

WB
Wedlake Bell

Contributor

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A Revenue and Customs Brief is expected to be issued imminently by HM Revenue & Customs concerning the judgment in Robinson Family Limited.
UK Tax
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A recent Tax Tribunal judgment, Robinson Family Limited1,  has held that the sale of a property lettings business by way of the grant of a sub-lease amounts to the transfer of a business as a going concern (TOGC) and is therefore outside the scope of VAT. This is contrary to the published practice of HM Revenue & Customs (Notice 700/9), which states that the grant of a lease cannot amount to a TOGC as it involves the creation and not transfer of an asset by the seller.

This is obviously an important case for VAT purposes but also from a Stamp Duty Land Tax (SDLT) point of view as any VAT charged on such a transaction is subject to SDLT.

A Revenue and Customs Brief is expected to be issued imminently by HM Revenue & Customs concerning the judgment in Robinson Family Limited. If the judgment is accepted it will be interesting to learn of any parameters as it seems unlikely that Robinson Family Limited can be limited to its facts owing to the principles of EU law that are involved.

Footnotes

1. Robinson Family Limited v HMRC 2012] UKFTT 360 is available at http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC02046.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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