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Supply which gives rise to registration or a charge to tax.
A supply must meet the following conditions in order to be a taxable supply: it must be made for a consideration (however, a number of free transactions are specifically stated to be supplies of goods or services so as to be charged to tax: see VATA 1994, Sch 4 sub-paras 5(1) and (4)); it must be a supply of goods or a supply of services; it must be made by a taxable person; it must be made in the UK; it must be made in the course or furtherance of the taxable person's business; it must not be exempt from tax.
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Questions relevant for an asset sale—tax issues—checklist This Checklist sets out a list of questions that may be relevant to determining the tax implications of an asset sale. This Checklist should be used in conjunction with Practice Note: Key tax considerations in an asset sale. For more information on pre-contract enquiries, see also Practice Notes: Capital allowances on property sales—pre-contract enquiries and Commercial Property Standard Enquiries—CPSE (the CPSEs, prepared by members of the London Property Support Lawyers Group and endorsed by the British Property Federation, provide standard questions relevant to a sale of commercial real estate). Key tax considerations in an asset sale Questions Answers obtained by the adviser General questions Are the parties companies, individuals or other types of entities, such as a partnership, trust or charity? Are there multiple sellers? Are there multiple buyers? Does the seller own legal and beneficial title to the assets? Will the buyer acquire both the legal and beneficial title to the assets at actual completion? ...
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A transaction must have five elements for UK VAT to be chargeable. It must:•be a supply of goods or a supply of services•be a taxable supply•take place in the UK•be made by a taxable person, and•be made in the course or furtherance of any business carried on by that personThis Practice Note explains what each of those five elements means.This Practice Note does not cover importation of goods or the circumstances where a UK person may be required to pay UK VAT on the supply of services from abroad, ie the reverse charge, for which see Practice Notes: VAT—the reverse charge on cross-border supplies and VAT—importing goods.This Practice Note includes references to EU Directives and case law; for information on the ongoing significance of EU Directives, and of judgments of the Court of Justice for the UK’s VAT rules, see Practice Note: Retained EU law and tax.A supply of goods or a supply of servicesThe first element has three parts. A transaction must:•be a ‘supply’•be categorised as either a ‘supply...
VAT is recoverable by a taxable person if it is attributable to taxable supplies made in the course or furtherance of a business. For an explanation of the rules on VAT recovery generally, see Practice Note: When can a person recover VAT?VAT paid on costs incurred in corporate transactions, including on the professional fees of accountants, lawyers and other advisers, may be recoverable depending upon the circumstances of the transaction. This Practice Note looks at the recovery of VAT on the costs of business sales and acquisitions, share sales and acquisitions, corporate restructurings, and share issues. It also covers VAT recovery by holding companies.For information on the recovery of VAT by a UK acquisition group in a private equity-backed buyout, see Practice Note: Tax and buyouts—deductibility and VAT recovery of acquisition group deal costs.This Practice Note contains references to judgments of the EU Court of Justice. For information on the ongoing significance of EU law in the UK following the end of the Brexit implementation period on 31 December 2020,...
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Forward funding agreement Date [date] Parties 1 [name of Fund] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at OR [address] (Fund) 2 [name of Developer] of OR incorporated in England and Wales with company registration number [number] whose registered office is at OR [address] (Developer) 3 [[name of Guarantor] of OR incorporated in England and Wales with company registration number [number] whose registered office is at OR [address] (Guarantor)] 1 Definitions In this Agreement, the following definitions apply: Acquisition Contract • the agreement between the Developer and the Fund for the sale and purchase of the Property made contemporaneously with this Agreement; Actual Completion • the date of actual completion of the sale and purchase of the Property by the Fund pursuant to the Acquisition Contract; Agreement for Lease • an agreement for lease relating to the Property entered into by the Developer after, but on the terms of, this Agreement; Appointments • the...
Placing agreement—AIM This Agreement is made on [insert day and month] 20[insert year] Parties 1 [insert name of Company] a company incorporated in [England and Wales] with registered number [insert company number] whose registered office is at [insert address] (the Company); 2 [insert name of the nominated adviser] a company incorporated in [England and Wales] with registered number [insert company number] whose registered office is at [insert address] (the Nomad); and 3 the persons whose names and addresses are set out in Schedule 1 (the Directors). Recitals (A) The Company was incorporated under the Companies Act [insert relevant year] as a [public OR private] company limited by shares under company number [insert number] on [insert date] under the name [insert name of company on incorporation]. [On [insert date] the Company [re-registered as a public company limited by shares and ]changed its name to [insert new name of company]]. (B) [A certificate permitting the Company to do business and exercise any borrowing...
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Is VAT chargeable on the sale of a business where the seller is not registered for VAT? UK value added tax (VAT) is chargeable on a transaction where a taxable person makes a UK taxable supply of goods or services in the course of furtherance of any business carried on by that person. This means that no UK VAT will be chargeable on a transaction where the seller is not a taxable person. A taxable person is a person who is, or is required to be, registered for VAT under Value Added Tax Act 1994. The rules for registration are complex but broadly a person is required to register for VAT if they make (or will make) supplies in excess of a certain threshold. A person can also apply for voluntary registration. For more details, see Practice Note: Who must and who can register for VAT in the UK? As a result, where the seller of the business is not VAT registered (or required to be VAT...
When transferring properties which have waived the exemption to tax which make up a property investment business of a deceased to beneficiaries for no consideration, is VAT chargeable? This Q&A will be relevant where properties are held personally, in the course of his trade, by the deceased rather than through a corporate structure and where the properties are in the UK. Under s 4(1) of the Value Added Tax Act 1994 (VATA 1994), in order for a transaction to be within the scope of UK VAT, it must: • be a supply of goods or a supply of services • be a taxable supply • take place in the UK • be made by a taxable person, and • be made in the course or furtherance of any business carried on by that person If one of these is not met, it will be outside the scope of UK VAT. For further information on these basic requirements, see Practice Note: When does VAT apply? and related notes...
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Tax analysis: In Visual Investments, the First-tier Tax Tribunal (FTT) dismissed an appeal against assessments disallowing VAT on legal services the appellant had claimed as input tax. The FTT found that the appellant was not the sole recipient of the legal services and, even to the extent that it was the recipient, there was not a direct and immediate link between the legal services and the appellant’s taxable supplies.
This week's edition of Tax weekly highlights includes: (1) News Analysis on the FTT’s decision to uphold penalties for invalid BADR claims in Cox, (2) News Analysis on the FTT’s decision in Queenscourt as to single supplies of hot takeaway meals for VAT purposes, (3) the Welsh Government laying draft Regulations to amend LTT higher residential rates exceptions and refund periods, and (4) News Analysis on the FTT’s decision in CATS North Sea Limited regarding the interaction between transfer of trade and capital allowances provisions.
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