Our company rents three floors of a building from a landlord on a 15-year lease but as a result of an increase in our home-working arrangements with staff we no longer need the top floor.
We therefore paid a third-party company £24 000 as an incentive for it to take over the remaining 12 years of the lease with our landlord. The lease has therefore recently been assigned from our company to them.
The solicitors and the contract clearly state that the payment is standard rated for VAT but the new tenant is saying that there is no obligation for them to issue a VAT invoice because it is a one-off transaction.
Is this correct? And can Taxation readers confirm that the payment is standard rated and not exempt? We are not aware that the new tenant has opted to tax the building.
Query 19 545 –...
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