Liaison with Valuation Office Agency and other offices: Trade Related Property
Due to the nature of Trade Related property (for example, public houses, hotels, care homes, petrol filling stations, cinemas, restaurants & theme parks) where the occupation and use of the particular, specially adapted, premises is usually essential and integral to the generation of the business income, a specialist liaison has been established between SAV and the VOA.
This is because it has been acknowledged that when such a business is sold as a going concern the sale price will reflect the combined value of the tangible assets together with the benefit of the other business assets such as contracts with customers, staff and suppliers, records of previous customers etc. Substantial value can be realised by combining the tangible and other business assets together for sale as a going concern, but this enhanced value may be reduced if the assets are split and sold separately.
In the unusual event of this type of business being transferred without some form of property interest, it would be highly likely that the value which might be otherwise achieved would be substantially diminished or removed. It is important to recognise this distinction from most other businesses where there is no such reliance on a specific property interest and business goodwill can be readily sold and will be of value irrespective of the actual premises.
Due to the technical aspects involved in this matter all valuations involving Trade Related property will be dealt with by the Goodwill team.
A practice note has been developed which explains the issues in more detail and sets out how HMRC and the VOA consider one should go about valuing/apportioning the price paid/worth of a business as a going concern between goodwill and other assets included in the sale.
You can see the practice note here.
|Additional Guidance: SVM150000|