.png)
.png)
An accountancy practice is relocating and is selling its old business premises to a bank. The building is subject to a VAT option to tax and the bank has suggested that, before the exchange of contracts, one of the five floors is let to a third-party tenant to enable the transaction to be a transfer of a going concern
My accountancy practice is selling the freehold of our building to a bank. We are relocating our business to a site out of town.
We need to add VAT at 20% to the sale proceeds because we opted to tax the building 10 years ago when we acquired it. However the bank has asked that before the exchange of contracts we create a three-year lease with a third-party tenant who will occupy one of the five floors in the building.
The bank says that because we are then selling the building to them with a prospective tenant in place the proceeds will avoid VAT because the deal will become a transfer of a going concern (TOGC). The bank will opt to tax the building itself before exchange of contracts.
I should add that if the deal falls through the tenant will lose his...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
