Option to tax
I have a client who purchased business premises 11 years ago and had to pay VAT thereon, which of course he reclaimed.
About 4 years ago he incorporated but the premises remained in his own name. He transferred his VAT reg. to the new company as a going concern and nobody, myself included, gave a thought to the property VAT reclaimed.
Now he's wondering what will happen should he retire and sell the business. He cannot charge VAT himself as he's not registered and presumably nor should the company 'cos it doesn't belong to them. If VAT has to be charged then presumably the buyer will simply reclaim it.
Maybe the VAT should have been repaid when he deregistered ? Bit late for that now, but otherwise would the company just charge VAT on the sale ? I seem to recall that there's something saying that 'option to tax' VAT does not have to be repaid when somebody deregisters after 15 years; this may have a bearing.
Any thoughts would be welcome !
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