Commercial transfers

This page forms part of a suite of guidance setting out the processes for reviewing and assuring complex change, including transactions between NHS trusts and foundation trusts.

Scope of this guidance

The purpose of this guidance is to provide a framework for NHS England’s review of commercial transfers.

NHS trusts and foundation trusts have legal powers to acquire and dispose of property – such as equipment, contracts, estate and intellectual property – by entering into commercial agreements; that is, sale and purchase agreements or novation agreements. Commercial transfers can be useful where only part of a trust is being divested and acquired, eg a bundle of services or one site.

Our role in reviewing commercial transfers falls under our general responsibilities to ensure foundation trusts comply with the conditions of their provider licence, and the equivalent of these conditions for NHS trusts.

Guidance in relation to commercial transfers is available in Appendix 10 to Assuring and supporting complex change: Statutory transactions, including mergers and acquisitions.

Note that the Health and Care Act 2022 introduces the ‘transfer scheme’ (section 69A), a new form of statutory transaction that allows for the transfer of liabilities as well as assets. Further details are available in Appendix 10 of the transactions guidance, as referenced above.

Reporting and risk assessment

Any proposed commercial transfer will be reportable to NHS England if it exceeds any of the financial limits outlined below:

  Reporting requirements 
Ratio Description Non-healthcare/ international UK healthcare
Assets  The gross assets* subject to the transaction* divided by the gross assets of the trust. >5% >10%
Income or expenditure The income or expenditure attributable to the assets or contract associated with the transaction* divided by the income of the trust. >5% >10%
Consideration to total trust capital The gross capital** or consideration associated with the transaction* divided by the total capital of the trust following completion, or the effects on the total capital*** of the trust resulting from a transaction. >5% >10%
* Gross assets are the total of fixed assets and current assets.

** Gross capital equals the market value of the target’s shares and debt securities, plus the excess of current liabilities over current assets.

*** Total capital of the trust equals taxpayers’ equity.

The most recent audited accounts should generally be used to calculate the above ratios. However, in the case where there has been a material change in the financial position of either trust since the date of the most recent accounts, we may choose to recalculate the ratios on a pro forma basis using current year or forecast figures.

In any case we may, following discussions with the transacting parties, choose to recalculate the ratios using data that we reasonably consider to be a more appropriate measure of the relative size of the transaction.

Transactions completed with the same counterparty during the 12 months before the date of the latest transaction should be aggregated with that transaction for the purposes of the above reporting thresholds. Trusts need to inform us of the latest transaction at an early stage in such cases.

Trusts and ICSs considering commercial transfers that exceed the above thresholds should discuss these with their NHS England regional team at the earliest opportunity.

NHS England will then take a view on the level of potential risk and whether an assurance process is required. This assessment will be made with reference to applicable elements of the risk assessment framework in Section 2 Assuring and supporting complex change: Statutory transactions, including mergers and acquisitions. The risk assessment process will also incorporate a decision on whether the transaction is significant or material, as defined in the guidance.

Assurance approach

The scope of any assurance process will depend on the nature of the commercial transfer in question. The approach could incorporate some or all of the key lines of enquiry and broader process set out in Assuring and supporting complex change: Statutory transactions, including mergers and acquisitions. Further key lines of enquiry may need to be explored based on the nature of the proposed arrangement.


Following an assurance process, one of our committees will make a decision regarding support for the proposed commercial transfer. This will be communicated to trusts in a letter outlining a narrative outcome of the review.

It is for the trusts to decide whether or not to proceed with the transfer, but we may use enforcement powers to stop a transfer from proceeding if we have significant concerns.

Further guidance

Guidance on carve-out due diligence is available at the end of Appendix 6 of Assuring and supporting complex change: Statutory transactions, including mergers and acquisitions. Appendix 10.7 of the same document references relevant legal considerations.