Readers’ forum: Hotel transfer

My client is selling a VAT-registered hotel business in a village in Yorkshire. The contract for the sale is between my client and an individual person – let’s call him Jack. It includes the usual statements about transfer of a going concern so no VAT is to be charged on the proceeds of the sale because Jack will be VAT-registered and carry on the same trade.

However my client has picked up on the local grapevine that Jack intends to rent the hotel to a separate legal entity – a partnership that involves him and a friend – let’s call her Jill. The partnership will then deal with the hotel trading such as the bar accommodation and restaurant rather than Jack as a sole trader. But is this gossip relevant to my client and will it affect the VAT position anyway? He suspects that Jack...