Revenue Publishes Updated Transfer of Business Document
On 31st July 2018, Revenue published an updated Transfer of Business document, revising the previous document which was reviewed in December 2017.
There are significant differences between the two versions when it comes to which transfers of property come within the transfer of business (TOB) provisions.
The December 2017 document confirmed Revenue’s view that TOB applied:
- where a property had been let on a continuing basis and was being sold to a tenant who is an accountable person; and
- in the case of a vacant property that was let or partially let on a continuing basis in the past.
Whereas, the 31st July 2018 version confirms that TOB will not apply to:
- “The transfer of a let property to the tenant…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…regardless of how the property had been used prior to its transfer”; and
- “A transfer of [property], of itself, without any additional assets (such as a letting agreement), which together with the immovable good, would constitute an independent undertaking…regardless of how the [property] had been used prior to its transfer”.
Vendors, their solicitors and tax advisors should review all property transactions currently in progress to ensure the correct VAT treatment is being applied in light of this updated Revenue guidance.
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