Valuation of acquisitions: general valuation rules for acquisitions - Section 20, VATA 1994
Subsection (2) of section 20 performs the same function for valuing acquisitions as subsection (1) of section 19 does for valuing supplies. In part (a), it makes the general valuation provisions of subsections (3), (4) and (5) of section 20, subject to the special valuation rules in Schedule 7. Part (b) provides that section 19 and Schedule 6 do not apply to the valuation of acquisitions.
Subsections (3) and (4) of section 20 provide as follows:
(3) If the transaction is for a consideration in money, its value shall be taken to be such amount as is equal to the consideration.
(4) If the transaction is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as is equivalent to the consideration.
Although these superficially resemble subsections (2) and (3) of section 19, there is an important difference. Because in section 20 the value is an amount “equal to the consideration”, the value is determined on a VAT-exclusive basis rather than a VAT-inclusive basis like section 19. (Under section 19, the consideration was expressed as containing the VAT within it, under s.20 it does not).
Subsection (5) of section 20 provides for the apportionment of a consideration when there is more than a single acquisition and mirrors sub-section (4) of section 19.