Purchase of commercial property

I am not feeling at my brightest today, having had some surgery yesterday, so I would be grateful if my fellow members could save me the mental effort of looking it up for myself.

VAT-unregistered new client company is buying commercial property (I believe a head lease, rather than the freehold) from a vendor who wants to charge VAT, so I assume that the vendor must have registered for VAT and opted to tax.  I am therefore now registering my client for VAT.

  1. I am also applying for my client to opt to tax (isn't it good that you can do this all online now?), but is it necessary to opt to tax in order to reclaim any VAT charged on the sale of the property?  I think it probably is because otherwise the property would be being acquired for the purpose of making exempt supplies of rent.
  2. The solicitor acting for my client is saying that registering for VAT (and perhaps, also opting to tax) are pre-requisites for the sale being treated as a TOGC, with which I am inclined to agree.  Am I right that a sale of a let commercial property satisfies the rules for a TOGC?
  3. The solicitor is asking if we can serve on the vendor a notice under Article 5.2B of the VAT (Special Provisions) Order 1995 to say that it does not apply to my client.  If it is a TOGC, why would we have to serve such a notice?
  4. Not really my concern, but the solicitor says that if VAT is charged (and reclaimed by my new client), SDLT would be payable on the price plus VAT.  Is he right?

Thank you for any answers.

Comments
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SDLT

mn2taxhbj |

Yes

Steve Kesby |
Steve Kesby's picture

TOGC & Otion to Tax

leshoward |
leshoward's picture

Thank you all

Euan MacLennan |
Euan MacLennan's picture

Yes

Steve Kesby |
Steve Kesby's picture

Dedication

tom123 |

Well!

Euan MacLennan |
Euan MacLennan's picture

Procedure

mhtax |