HMRC internal manual

VAT Transfer of a going concern

Land and Property: Property rental business: minimum occupation

HMRC has frequently been asked to define how small the part of land or building that is rented to a third party needs to be for HMRC to treat the transfer as ‘business’ for TOGC purposes.

It is our view that it is not possible or desirable to specify in terms of floor space or other percentages what a limit should be. It is important to look at each case and the precise circumstances.

A property business can be a partially let building and can be part of a TOGC providing that the part that is let constitutes economic activity. This may include electricity sub-stations or space for advertising hoardings providing there is a lease in place.