Opting effect

A commercial investment property is held by a partnership which has opted to tax it and VAT is charged on the rent. The property consists of: a ground floor which is used as retail premises; a first floor used for storage and ancillary purposes; and a second floor which is residential but has not been used or lived in for 20 years.

The whole property had been rented to a retailer who has now moved out. A new retailer has recently taken a new lease of the ground floor only for which rent plus VAT is paid.

The first and second floors which both have separate access have reverted to the landlord. He is thinking of selling these for residential use and this would be done by way of long leases of 125 years. My questions relate to the granting of the new separate...