The wrong heading

KEY POINTS

• Long leases granted to developer.
• VAT incurred on lease premium.
• Who is the developer?
• Obtaining clearance from HMRC.

This is a case study in two parts – one technical and the other bureaucratic. It is relevant to this story that the writer is not a full-time VAT specialist although he has practised it part-time since 1977.

Part I: technical

In the mid-noughties when all was golden in the world of Monopoly® Megalopolist which owned nearly half the board acquired 999-year leases of a number of empty warehouses immediately east of the City in Whitechapel.

It converted the upper floors of these buildings into apartments and the ground floors into retail units. These conversions were going to be expensive incurring a lot of VAT.

The sale of the residential conversions would...