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VAT option to tax on a commercial property conversion project.
My limited company client owns the freehold of a large commercial property. The director is assessing the conversion of the building into residential use – his idea is that it will be converted into 12 apartments. If planning permission is obtained the building will be sold to a developer which can then build the apartments.
The company is VAT registered so my view is that the director would be best advised to opt to tax the property now. The reason for this is that it would allow the company to claim input tax on all of the professional fees linked to the planning application such as those levied by architects and surveyors.
As I understand it the freehold sale to the developer will then qualify as a transfer of a going concern (TOGC) as long as the developer also makes an option-to-tax election on the property and...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
