The transfer of a business between legal entities is generally treated as the 'transfer of a going concern' (TOGC). In such cases, the transfer is ignored for VAT purposes as if there is no supply when the assets are transferred.
Hitherto, HMRC did not accept that the transfer of a business in or out of a VAT group could qualify as a TOGC where the business was conducted solely within the VAT group.
The case of Intelligent Managed Services Ltd challenged that view at the Upper Tribunal and the company was successful in its appeal.