Avoid VAT and reduce SDLT on commercial property

[@DaTestKa]

Very good explanation. Thanks. Question. When you have commercial property with option to tax and after 3 years you move your own VAT registered business to that commercial property. What's needs to be done? As I see in the guidelines, No Connected party is to occupy/rent the opt to taxed property. And you only 6 months to change your mind? What needs to be done? Inform HMRC? Pay the VAT back? Will they be able to remove opt to tax or the property is stuck with it for 20 years? Thanks

[@UK-Property-Tax-Accountants]

This is a great question. Sadly there is no simple straightforward answer. You will need to book a tax consultation for us to understand your position for us to provide you with the right tax advice.

[@mba0073]

Nice video. So you cover a scenario where a commercial property is purchased with a view to developing it into residential as well as a scenario of purchasing a company that owns a commercial property as a going concern. How about the scenario of just purchasing a commercial property with an existing commercial lease with the intention that it will remain commercial and let out to a 3rd party tenant? I don’t Think this was covered in the video unless I missed it 🙈 can we avoid paying the vat in the first place and negating the need to claim this back?

[@UK-Property-Tax-Accountants]

This was purposefully not picked up in this video. However, you can claim VAT if you charge tenants VAT on the lease.

[@mba0073]

Optimise - UK Property Tax Specialists Ah ha 🧐. So you can claim back the VAT on the purchase but there is ‘simply’ a cash flow timing issue as you will need to pay and claim back rather than not paying in the first place in the scenarios you have discussed. Have I got that right? If that is the case then unfortunately you pay SDLT on the VAT surely?

[@UK-Property-Tax-Accountants]

Yes on both counts

[@claire8341]

Can you use TOGC on the flat rate scheme? Would the seller have to be on the flat rate scheme? Can you opt to pay VAT upfront and then go on flat rate - what are the implications? Thank you

[@UK-Property-Tax-Accountants]

This is a great question. Sadly without knowing the specifics it is not something I can answer here due to the potential complexities. Please do speak to your accountant as soon as you can about this particular subject

[@malhotra6143]

Hello - I am planning to buy under construction service apartment. It's in 20%-20%-60% payment plan. I am paying 20% now; Do i need to fill VAT1614A form now or in 2025 when construction completes?

[@UK-Property-Tax-Accountants]

There should be no VAT issues if you are buying a property already under construction. You need to speak to the seller about the option to tax method they have used

[@DavidTheDave]

Am I understanding correctly that SDLT is added to the VAT inclusive price meaning you are taxed on your tax?

[@UK-Property-Tax-Accountants]

Yes sadly

[@UK-Property-Tax-Accountants]

Have you used the Transfer of Going Conver (TOGC) strategy to minimise both Value Added Tax (VAT) and Stamp Duty Land Tax (SDLT) when it comes to buying a commercial (non-residential) building?

[@mahbuburrahman5909]

Please

[@mahbuburrahman5909]

Hello haw to apply TOGC

[@mahbuburrahman5909]

Hello haw to apply vat namber

[@UK-Property-Tax-Accountants]

Please register for VAT is www.gov.uk/vat-registration

[@UK-Property-Tax-Accountants]

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