Exempt surrender, subject to opting

If the seller is a tenant, an outright disposal of the property might take the form of:

aan assignment of the lease; or

ba surrender of the lease.

The surrender of a lease of a commercial property is exempt, unless the tenant has opted to tax the property (VATA 1994, Sch. 9, Grp. 1, Note (1)).

Lease surrenders and TOGCs: not use the same asset

If a lease is assigned, the buyer becomes the new tenant under the lease. HMRC have long accepted that, if the other conditions were met, the assignment of a lease with the benefit of a sublease could be a transfer of a business as a ‘going concern’ (TOGC).

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