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Commercial property transactions
WHO CAN BENEFIT FROM SAVINGS? Investors Developers Owner-occupiers Property occupiers  SOLUTIONSConsultancy Compliance Apportionments HM Revenue and Customs SPECIFIC SPECIALIST AREAS Purchases Sales Option to tax Capital Goods Scheme Contributions CASE STUDY A overseas investor is planning to purchase a second hand office building located in the UK. The building has four tenants generating an income stream. The proposed purchase price is £6 million. In a few years it is proposed to redevelop the building at the cost of £3 million. VAT in the region of £1.575 million is at stake and if this becomes an irrecoverable cost will have a huge effect on the return on investment. Consideration of the building usage by the vendor, major capital expenditure by the vendor, the sources of project funding and the status of existing and future tenants will all have a major effect on the project returns. With appropriate planning and compliance in place the VAT costs can be effectively eliminated. Incorrect treatment or lack of awareness of the anti-avoidance legislation in this area may result in unexpected and costly VAT liabilities. |
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