P6 (U.K.) – Queries

If a person is Residence in Uk after passing the residency test which is staying over 183 days in uk , or spent 91 days on average THEN you have to decide if he is Ordinary Residence or Not Ordinary Residency

1- To be Not Ordinary Residence :- you have 2 cases.
A- On Arrival :
intention is to remain in the UK is LESS than 3 years
if the 3 years is exceeded then the individual become Ordinary Resident form the start of the fiscal year after the 3rd anniversary of arrival
B- At Departure :
To retain the Not Ordinary Resident Status Must have
-Full time contract of employment abroad &
-one complete tax year outside UK &
-Duties perform outside UK &
-Residency test

2- To be Ordinary Resident :- also you have 2 cases:
A- On Arrival
Intention is to remain in the UK for MORE than 3 years
Eg. Purchases a property in uk ,employment contract in Uk ,ETC

B- On Departure
also individual losses his OR status if he leave the UK Permanently atleast 3 years
or leveing the uk under a full time contract

Wish that you got it know and not confused anymore 🙂

There has been a confusion during our revision sessions regarding whether VAT is chargeable on the sale of a business, buildings, machinery and equipment. With reference to Kaplan Notes, the rules are summarised as follows:

VAT MUST BE CHARGED on the sale of a trade and assets UNLESS it qualifies as a transfer of a GOING CONCERN.

A transfer of a going concern is OUTSITE THE SCOPE OF VAT and the result is that no VAT should be charged.

The sale of a trade and assets of a business is regarded as a going concern if the following conditions are met:

1) The trade and assets purchased from the owner selling or transferring the business must be a going condern.

2) The buyer must use the assets to carry the SAME KIND OF BUSINESS.

3) The buyer must be VAT registered or to be required to register for VAT.

4) There must NOT be a significant brake in trading before and after the purchase of the business.

Let’s assume the above conditions are met. The general rule is that NO VAT is charged on the sale of the trade and assets as if it is a transfer of a going concern.

An EXCEPTION to this rule is if the owner is selling a BUILDING which is less than 3 years old at the date of the sale or it has opted to tax the building in the past. VAT must be charged in this case.

Assuming the above is the case (< 3 year rule and opt to tax), if the new owner opts to tax the building at the time of the purchase, this removes the requirement to charge VAT on the sale. Confusing…..I know. Hope this makes little sense at least.