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Purchasing Opted Commercial Building Case Study

Purchasing Opted Commercial Building Case Study

VAT

A business consulted us when purchasing an “opted” commercial building to convert it into several self-contained apartments.

We assisted them in disapplying the seller's “option to tax”, which saved the business from paying VAT when paying the purchase price, benefitting their cashflow. Furthermore, as SDLT is calculated on the gross selling price of the building, this reduced the SDLT cost of the building’s purchase.

We were also able to advise on the relevant works to the building that qualified for the reduced rate of VAT (5%) and how the business could recover the VAT incurred when it sold the newly created apartments. Therefore, the VAT incurred was not an additional cost to the project.

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