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Is the purchase of office property by one of the tenant firms outside the scope of VAT transfer of a business as a going concern (TOGC)?

Q: My client is a VAT registered architect and rents 2 of 3 offices in a property, the 3rd being rented to a 3rd party. My client now wants to buy the property from the landlord, including the lease currently in place with the 3rd party for the 3rd office. My client plans to continue renting the 3rd office out but will use the other 2 offices for his own business still. Can this still be an outside the scope of VAT transfer of a business as a going concern (TOGC)?

A: Yes. The seller and / or buyer does not have to be using the whole property for rental purposes in order for the entire transfer to constitute a TOGC for VAT purposes, as long as part of the property is being let at the time of transfer and all the normal TOGC requirements are met. See Notice 700/9 paras 1.2 & 2 for the TOGC requirements; note within this the 2 additional option to tax requirements that must also be met by the buyer if the property concerned is less than 3 years old, or has been opted to tax by the seller.