Case – Why it is important to understand whether a property is opted to tax for VAT purposes

Introduction

Our client was buying land that the vendor thought was within the scope of an Option To Tax 

The Issue  

The addition of VAT to the sale price would make the transaction untenable, as the client would not be able to recover the VAT. 

How we solved it 

We reviewed documentation dating back to 2004, when the original Option to Tax was made to understand whether the scope of the Option had been fully defined. We also reviewed the VAT legislation that was in force at the time and identified arguments that would subsequently disapply the Option to Tax even if it had been in place. 

The Outcome 

We presented our arguments to the seller’s solicitors to enable the sale to proceed without a VAT charge being applied, a great outcome for our client. 

Next Steps

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