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VAT on a freehold commercial building sale

Bought in 2016, claimed input VAT, not opted to tax, now wish to sell to themselves; is VAT due

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My client purchased a commercial building in May 2016 for the use of its own trade.  VAT was charged on the purchase which they reclaimed.  An option to tax was not exercised and they now wish to sell the building to themselves and charge the compnay rent.  Is output VAT chargeable on the sale?



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By Les Howard
11th Dec 2018 18:05

If the commercial building is more than 3 years old, the supply is exempt.
But, if the purchase price exceeded £250,000, you will need to consider the Capital Goods Scheme.

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By carol.w
12th Dec 2018 09:35

Thanks Les
Yes, the building is about 20 years old and had been in commercial use by the vendor's business for that time.
The purchase price was £ 199,000 so we are also inside the CGS limit.
I therefore believe my client can go ahead and sell without having to charge VAT.

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