VAT & Property

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VAT advice on property transactions, whether you are a developer, contractor, investor, or just have a property in your business. Helping you maximise the benefit of the (sometimes hidden) VAT reliefs that apply to property transactions.

Understanding How VAT Applies to Property Transactions

The full spectrum of VAT rates could apply across a property development; VAT exemption, the VAT zero-rate, reduced-rate VAT (5%) and standard-rate VAT (20%), and certain property transactions are even outside the scope of VAT. Because of this complexity and potential restrictions to the recovery of VAT on related costs, VAT should always be a key consideration in all property projects

Working with Developers and Investors to Maximise VAT reliefs

The rules dictating how VAT reliefs apply can be complex and are often under-utilised by developers. We assist property developers maximise VAT reliefs and minimise VAT costs. VAT reliefs will only typically apply if certain conditions are met, so with our wide knowledge of how VAT applies to property transactions, we are perfectly placed to help you ensure that these conditions are identified and adhered to. If you’d like further help or information about VAT & Property please get in touch.

Case Study

VAT & Property

Understanding How VAT Applies to Property Transactions

Remove VAT from property acquisition

Intro

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 disapprove of 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.

Working with Developers and Investors to Maximise VAT reliefs

Maximise VAT relief on residential refurbishment

Intro

Our client had acquired an existing block of flats to refurbish for rental.

Issue

VAT costs would be irrecoverable but we needed to minimise these costs.

How we solved it

We identified areas where the 5% VAT rate and 0% VAT rate could be applied and thenadvised the client accordingly.

We drafted a technical note to support the treatment that the client shared with the contractors to ensure that the lower rates of VAT were applied to their invoices.

The Outcome

The client significantly reduced the level of irrecoverable VAT that they paid.

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