Hotel offshoring

We have an offshore registered client who holds and lets properties through a British Virgin Island registered company.

A few years ago it had acquired a UK hotel as a going concern and on completion of purchase had let the hotel to another company. The purchase price of about £1 million had included £150 000 for goodwill and fixtures and fittings. No VAT had been charged by the vendor nor is our client registered for VAT. That hotel has now been sold as a going concern realising a handsome capital gain for the client. On this occasion prior to repeating a similar purchase of a UK hotel the client's solicitor has sought our advice concerning VAT.

We have been asked to advise whether the vendor can effectively sell the hotel to our client as a going concern and thereby ignore VAT. Our response is that the sale...