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Readers' forum: Property refurbishment

© Copyright LexisNexis 2024. All rights reserved.

22 January 2019

Issue: 4680 / Categories: Forum & Feedback

Seeking a VAT-efficient way to pay for property works.

We act on behalf of a successful family company TradeCo which is VAT registered. Its premises are owned by a separate company (PropertyCo) which in turn is owned by two of the six shareholders of TradeCo.

PropertyCo is not registered for VAT and owns only the business premises of TradeCo – which is not opted to tax.

A proposed refurbishment is likely to cost about £200 000 excluding VAT. The work will comprise improvements capital expenses and repairs. It has been suggested that TradeCo should undertake the refurbishment work and then invoice on the structural work to PropertyCo which would have to absorb the VAT but would benefit from the capital cost in due course.

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Readers' forum: Property refurbishment

© Copyright LexisNexis 2024. All rights reserved.

22 January 2019

Seeking a VAT-efficient way to pay for property works.

We act on behalf of a successful family company TradeCo which is VAT registered. Its premises are owned by a separate company (PropertyCo) which in turn is owned by two of the six shareholders of TradeCo.

PropertyCo is not registered for VAT and owns only the business premises of TradeCo – which is not opted to tax.

A proposed refurbishment is likely to cost about £200 000 excluding VAT. The work will comprise improvements capital expenses and repairs. It has been suggested that TradeCo should undertake the refurbishment work and then invoice on the structural work to PropertyCo which would have to absorb the VAT but would benefit from the capital cost in due course.

An alternative solution has been...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

4680

Categories: Forum & Feedback [1]

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