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Land was purchased in 2009 with the intention of building a residential property on it and the input VAT incurred was therefore reclaimed. The land is now being sold by the client without development
My client purchased some land in March 2009 for £70 000 plus VAT of £10 500. He reclaimed the input tax because he was hoping to get planning permission to build a new house on the land and then sell it; unfortunately this intention never materialised.
The client is now selling the land to a car valeting business for £70 000 to recover his money – but the business will not be VAT registered (because its annual sales are less than £79 000) and therefore cannot claim input tax if my client charges VAT on the selling proceeds.
Does VAT need to be charged? My client does not think he ever opted to tax the land himself so possibly not. But would this cause a problem with his initial input tax claim in 2009? I presume that it would not because this was more than four...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
