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Which of the following must apply for the sale of theentire business to be treated as a transfer of
a going concern for VAT purposes,such that the transfer is not a taxable supply?
1. All ofthe assets and liabilities of the business must be transferred
2. The new owner must use the assetstransferred in the same type of business asthe seller.
3. The new owner must be an established VAT registered trader before the transfer
4. Theremust be no significant break in the normal trading pattern of the business.
A. 1 and 2
B. 2 and 4
C. 1 and 3
D. 3 and 4
ans; B . I only know point 3 will not be correct. other point i am confuseAs above response indicates, the tax tutor is unavailable at the moment. It’s B.
You can ask any other questions on general tax forum if you are happy for a non-tutor to respond
while tutor is away-https://opentuition.com/forum/acca-forums/acca-tx-taxation-forums/
The AI may also be able to help you-
The correct answer is B. This means that the buyer must acquire all of the seller’s assets, including tangible assets (such as property, equipment, and inventory) and intangible assets (such as goodwill, trademarks, and customer lists). The buyer must also assume all of the seller’s liabilities, including outstanding debts, tax obligations, and customer warranties.
Hearthe, welcome to the Opentuition forums. The answer is B as these are two of conditions required. All assets and liabilities do not have to be transferred but essential assets needed to carry on the business as a going concern do need to be transferred. What these assets are will vary in different situations. Hope this helps.
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