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5(1)Subject to sub-paragraph (2) below, where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, that is a supply by him of goods.U.K.
(2)Sub-paragraph (1) above does not apply where the transfer or disposal is—
(a)a gift of goods made in the course or furtherance of the business (otherwise than as one forming part of a series or succession of gifts made to the same person from time to time) where the cost to the donor [F1of acquiring or, as the case may be, producing the goods was] not more than [F2£50];
(b)subject to sub-paragraph (3) below, a gift to any person of a sample of any goods.
[F3(2A)For the purposes of determining the cost to the donor of acquiring or producing goods of which he has made a gift, where—
(a)the acquisition by the donor of the goods, or anything comprised in the goods, was by means of a transfer of a business, or a part of a business, as a going concern,
(b)the assets transferred by that transfer included those goods or that thing, and
(c)the transfer of those assets is one falling by virtue of an order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services,
the donor and his predecessor or, as the case may be, all of his predecessors shall be treated as if they were the same person.]
(3)Where—
(a)a person is given a number of samples by the same person (whether all on one occasion or on different occasions), and
(b)those samples are identical or do not differ in any material respect from each other,
sub-paragraph (1) above shall apply to all except one of those samples or, as the case may be, to all except the first to be given.
(4)Where by or under the directions of a person carrying on a business goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, that is a supply of services.
(5)Neither sub-paragraph (1) nor [F4sub-paragraph (4) above] shall require anything which a person carrying on a business does otherwise than for a consideration in relation to any goods to be treated as a supply except in a case where that person [F5or any of his predecessors is a person who (disregarding this paragraph) has or will become] entitled—
[F6(a)under sections 25 and 26, to credit for the whole or any part of the VAT on the supply, acquisition or importation of those goods or of anything comprised in them; or
(b)under a scheme embodied in regulations made under section 39, to a repayment of VAT on the supply or importation of those goods or of anything comprised in them.]
[F7(5A)In relation to any goods or anything comprised in any goods, a person is the predecessor of another for the purposes of this paragraph if—
(a)that other person is a person to whom he has transferred assets of his business by a transfer of that business, or a part of it, as a going concern;
(b)those assets consisted of or included those goods or that thing; and
(c)the transfer of the assets is one falling by virtue of an order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services;
and references in this paragraph to a person’s predecessors include references to the predecessors of his predecessors through any number of transfers.]
(6)Anything which is a supply of goods or services by virtue of sub-paragraph (1) or (4) above is to be treated as made in the course or furtherance of the business (if it would not otherwise be so treated); and in the case of a business carried on by an individual—
(a)sub-paragraph (1) above applies to any transfer or disposition of goods in favour of himself personally; and
(b)[F4sub-paragraph (4) above]applies to goods used, or made available for use, by himself personally.
[F8(7)The Treasury may by order substitute for the sum for the time being specified in sub-paragraph (2)(a) above such sum, not being less than £10, as they think fit.]
Textual Amendments
F1Words in Sch. 4 para. 5(2)(a) substituted (31.7.1998 with effect as mentioned in s. 21(6) of the amending Act) by 1998 c. 36, s. 21(2)(6)
F2Words in Sch. 4 para. 5(2)(a) substituted (8.3.2001) by S.I. 2001/735, art. 2
F3Sch. 4 para. 5(2A) inserted (31.7.1998 with effect as mentioned in s. 21(6) of the amending Act) by 1998 c. 36, s. 21(3)(6)
F4Words in Sch. 4 para. 5(5)(6)(b) substituted (retrospectively) by 1995 c. 4, s. 33(3)(a)
F5Words in Sch. 4 para. 5(5) substituted (31.7.1998 with effect as mentioned in s. 21(6) of the amending Act) by 1998 c. 36, s. 21(4)(6)
F6Sch. 4 para. 5(5)(a)(b) substituted for words in Sch. 4 para. 5(5) (28.7.2000 with effect as mentioned in s. 136(10) of the amending Act) by 2000 c. 17, s. 136(9)
F7Sch. 4 para. 5A inserted (31.7.1998 with effect as mentioned in s. 21(6) of the amending Act) by 1998 c. 36, s. 21(5)(6)
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