HMRC: Change In Policy Regarding TOGCs

Summary and implications

Following the case of Robinson Family Ltd v HMRC* HMRC have been forced to retreat from their long standing position that the grant of an overriding lease does not amount to a transfer of a going concern (TOGC).

The main points are:

• HMRC are not intending to appeal the case.
• A briefing note published by HMRC seeks to restrict the impact of the case.
• HMRC acknowledge that overpaid SDLT may be repayable.

Robinson Family Ltd v HMRC

The case of Robinson Family Ltd v HMRC has determined that for VAT purposes a TOGC did occur when the claimant sold, by way of a sub-lease, its interest in property. The key points of the case are:

• The court must look at the substance rather than the form of the transaction.