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Where Taxpayers and Advisers Meet

Liquidation, non-VAT registered, 100k stock

Incredulum
Posts:2772
Joined:Thu Dec 03, 2009 5:35 pm
Re: Liquidation, non-VAT registered, 100k stock

Postby Incredulum » Wed Apr 14, 2021 2:45 pm

And even if you could justify it, wouldn't you still have an unregistered organisation (the executors) making supplies of goods worth in excess of the VAT registration threshold?
Distributions by executors to beneficiaries cannot possibly be a supply for VAT purposes. Can they? There's no consideration.
It is clear from the European Court of Justice (CJEU) case of Apple & Pear Development Council (VBNB72200) that if an activity involves the making of supplies of services for no consideration that these cannot be seen as taxable supplies. An activity that involves making no taxable supplies cannot be business.
vbnb22000

Incredulum
Posts:2772
Joined:Thu Dec 03, 2009 5:35 pm

Re: Liquidation, non-VAT registered, 100k stock

Postby Incredulum » Wed Apr 14, 2021 4:03 pm

& if the company were to register for VAT, and make the distribution on the basis of book value (so, margin scheme, no VAT due - and indeed a potentially embarrassing VAT reclaim from HMRC which would be bound to give rise to questions so I guess would be best ignored?), then how do you feel about the executors' position from a VAT perspective as they slowly liquidate the assets - by getting a third party to sell them? Or if the executors distribute to the beneficiaries, how do you feel about the latter slowly liquidating the assets from a VAT perspective?


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