The availability of TOGC treatment remains an important and controversial area for real estate transactions. HMRC correctly accepts that a property which is only partly let can be a TOGC. But the authorities indicate that HMRC may well be wrong to continue to assert that TOGC treatment is unavailable on an indirect transfer or sub-sale. Similarly, HMRC’s view that TOGC treatment is only available for a development site where physical works have started may be contrary to EU Law. Barter transactions raise difficult questions of characterisation and it is suggested that this should normally follow the economic realities rather than turning on quirks of domestic property law.
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The availability of TOGC treatment remains an important and controversial area for real estate transactions. HMRC correctly accepts that a property which is only partly let can be a TOGC. But the authorities indicate that HMRC may well be wrong to continue to assert that TOGC treatment is unavailable on an indirect transfer or sub-sale. Similarly, HMRC’s view that TOGC treatment is only available for a development site where physical works have started may be contrary to EU Law. Barter transactions raise difficult questions of characterisation and it is suggested that this should normally follow the economic realities rather than turning on quirks of domestic property law.
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