A property developer client is going to buy 2 flats above a pub from pubco, in the name of devco, +VAT (OTT on the pub). There will be 4.5 months inbetween exchange & completion, during which time devco will do a decent amount of renovation works. Flats in unhabitable condition on exchange.
Devco will then back-to-back on the completion to (unrelated) Mr X, who will let them as student flats.
1. Am I right in thinking that whether-or-not a 1614D is provided to pubco, when devco sell to Mr X, the sale is exempt?
2. Does it make a difference if the flats are already already tenanted when sold to Mr X?