Divorce, TOGC etc

[Nonimous]

Under the terms of their divorce, Mr B handed over the business (assets, client list etc) to Mrs B.

This would I think normally have been a TOGC. However, within a month Mrs B decided that she wanted nothing to do with it and sold about half the assets.

I am aware that the VAT manual says it cannot be a TOGC if there is an immediate transfer of business, but how immediate is immediate? .

I cannot find anything suggesting an exemption for transfers in the event of divorce

[section 44]

How long after her acquisition did she dispose of the assets/business?

As with many things, the position isn't clear and it is a question of degree of risk.

Did she receive income during her period of ownership? did she incur expenses during her period of ownership? If so then I do not see why the transfer to her would not be capable of being a TOGC even if she disposed of the assets/business within say a few days.

[section 44]

I cannot find anything suggesting an exemption for transfers in the event of divorce

I'd be surprised it its exempt for VAT purposes.

I haven't looked at this but I wonder whether or not there would anything around there not being a taxable supply for consideration if the transfer was pursuant to divorce proceedings?

[Generix]

I cannot find anything suggesting an exemption for transfers in the event of divorce

I'd be surprised it its exempt for VAT purposes.

I haven't looked at this but I wonder whether or not there would anything around there not being a taxable supply for consideration if the transfer was pursuant to divorce proceedings?

don't think this is possible, otherwise you've just discovered an awesome tax avoidance scheme

Did she operate the business at all? If no then no TOGC.

Wouldn't the first TOGC still stand and the second, (otherwise potential) TOGC be the one in jeopardy of losing the TOGC treatment, I can't remember and am 4 minutes from leaving the office, so can't be bothered to reach over, pick up my orange book and read it!!)

[section 44]

but if there is a supply, what's the consideration/value of the supply?

[Generix]

but if there is a supply, what's the consideration/value of the supply?

Good point.

As I'm not married I don't want to speculate what the 'value' of ending a nightmare of having to put up with a nagging wife for many more years is

If it was under the 'terms of the divorce' was there some sort of value assigned to it, as I imagine they must have decided that she could have the business rather than a cash settlement?

[section 44]

there may be value but it doesn't look like consideration (no supply)

[Nonimous]

I did wonder about an exemption, because as I understand it there would be no SDLT if it had been property changing hands rather than a business.

[Generix]

there may be value but it doesn't look like consideration (no supply)

You don't think its a barter transaction; trading further years of nagging for value of business?