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Many advisers are unaware of the VAT time limits that apply to some property deals, resulting in unexpected liabilities.
KEY POINTS
- Land and property transactions can be complex with large sums of tax at stake.
- Take particular care when there has been a change of business plan.
- A six-year window applies for VAT payback and clawback.
- An option to tax on a particular building or property will automatically lapse only when no interest in it has been owned for six years.
- Providers of exempt supplies considering the purchase of property subject to an option to tax should establish whether itcould be revoked.
If 100 accountants in practice were asked what VAT issue gave them the most sleepless nights my guess is that at least 80 would refer to land and property deals. The reason for such concern is likely to be threefold:
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