Revenue has updated its guidance in relation to transfer of business relief. Download the guide
A transfer of an immovable good which is subject to:
a. an existing letting agreement,
b. an agreement to lease, or
c. a licence to occupy,
comes within TOB provisions, as together those assets are capable of constituting an independent business or undertaking.
A transfer of an immovable good, of itself, without any additional assets (such as a letting agreement), which together with the immovable good, would constitute an independent undertaking cannot come within TOB, regardless of how the immovable good had been used prior to its transfer.
The transfer of a let property to the tenant will not be regarded as coming within TOB provisions as the only asset being transferred in those circumstances is the property itself and the transfer of a property without any additional assets, which together with the property would constitute an independent undertaking, cannot come within TOB, regardless of how the property had been used prior to its transfer.
The transfer of a retail premises together with the stock and fittings used in that retail business falls within the provisions of TOB. The transfer of the assets of a letting business which includes property which is part let, part vacant and part undeveloped, by a single vendor in one transaction to a single purchaser, falls within the TOB provisions. The assets in question must however be shown to be assets of the letting business rather than assets of a separate business such as a development business. For the purposes of determining if a property is an asset of the letting business it will be necessary to show that the property was to be developed with the intention of being used for the purposes of that letting business. The appropriate CGS treatment should be applied to each property transferred.
Where a number of persons co-own a property which is let, the transfer by one of the co-owners of an interest in the property, whether to another co-owner or to a third party, is treated as falling within the scope of TOB.
Where an option to acquire an immovable good is purchased the VAT treatment of that option will follow the treatment of the transfer of the immovable good to which the option applies so that, if the transfer of the immovable good falls within the TOB provisions so too will the sale of the option to acquire those immovable goods. To note: In the case of a transfer of property consisting of multiple units, the appropriate CGS treatment should be applied to each unit on an individual basis.