DMBM540400 - Debt and return pursuit: Insurance Premium Tax: Transfer of going concern

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Transfer of a going concern is where a business is transferred from one trader to a new, separate trader, or where the status of a registered person carrying on a business change e.g. from a branch of an overseas insurer to a separate UK company.

Regulation 7 (3) (a) of the Insurance Premium Tax Regulations 1994, provides:

Where the transferee of a business has been registered under paragraph (1) above with the registration number previously allocated to the transferor

(a) any liability of the transferor existing at the date of the transfer to make a return or account for or pay any tax under Part III of these Regulations shall become the liability of the transferee,

The requirements of transfer of a going concern are:

• the existing business must deregister following the transfer;
• the new owner must carry on the business under the old owner's IPT registration number; and
• both the former owner and the new owner must agree to transfer of liability on form IPT 68.

If the requirements for TOGC are not met there is no transfer of liability, and the former owner remains liable for the debts he incurred (See V2-01 Insurance Premium Tax).