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HMRC internal manual

VAT Transfer of a going concern

Land and Property: Property rental business: rent free period

A building owner may sell his property with the benefit of tenants who are enjoying an initial rent-free period and have contract to pay rent in the future. The seller can be regarded as carrying on a property rental business which is thus capable of being transferred. This follows the principles of the Hordern case discussed at VTOGC3400. There is no requirement for the seller to have made taxable supplies for him to sell a business as a TOGC.