Tax Rebates & Refunds

Investors could be eligible for stamp duty tax rebate

December 20, 2012
Posted in Other Tax, Tax Rebates — Written by Chris

Following a recent decision by the Tax Tribunal on ‘transfers of a going concern’, many investors may not be eligible to claim a stamp duty land tax rebate.

The Tax Tribunal recently decided that in some cases, VAT may have been levied on the transfer of business assets when it shouldn’t have been. These cases should have been considered a ‘transfer of going concern’ or a TOGC.

Sales of assets are now considered to be TOGCs when the assets sold together are capable of being run as a business. Another criterion for TOGC qualification is if the person the assets are sold to is planning to use the assets to carry on the same type of business.

The new decision by the tax tribunal means that some investors, and in particular, property rental business investors, may now be due a tax refund. This is because TOGCs are outside the scope of VAT.

HMRC has made an announcement on the decision but did not mention tax refunds on stamp duty land tax (SDLT). John Christian, from law firm Pinsent Masons, remarked on this:

“HMRC’s announcement was expected but it is surprising that the announcement does not deal with the important issue of SDLT reclaims on transactions which should have been given TOGC treatment,”

“Investors should review their acquisitions over recent years to see if any acquisitions should have qualified as a TOGC and consider making SDLT reclaims.”

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