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VAT on legal fees - sale of the property

Client - property developers sells one of his properties, together with the sales documents there

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Hello, can you please help?

Client - property developers sells one of the properties. Together with the sales documents there are agents invoices of fees, vat included.

Is it possible to reclaim VAT on the legal fees related to the sale of the commercial property? Whic legislation can be referenced?

Thank you

Replies (5)

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Jason Croke
By Jason Croke
23rd Jun 2021 16:49

When they sold the property, did they charge VAT on the sale?

Was the commercial i) property opted to tax or ii) is the commercial property less than three years old?

Right to reclaim VAT is always on the basis that a VATable sales has been made. Excepting partial exemption rules.

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Replying to Jason Croke:
By [email protected]
23rd Jun 2021 17:05

Thank you for the explanation

There was no VAT on sale
The property is a commercial property

I have not got info if the client has opted for the tax or not, will clarify

Can you please advise if the partial exemption rules are applicable?


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By The Dullard
23rd Jun 2021 16:51

Is he VAT registered? And did he charge VAT on the sale?

You're sure it was commercial property?

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By lionofludesch
23rd Jun 2021 17:22

Not enough information to say for definite but you need to look at the partial exemption rules. It'll depend on the numbers.

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Jason Croke
By Jason Croke
24th Jun 2021 10:04

If they didn't charge VAT on the sale then they are not entitled to reclaim any input tax, they will need to do a partial exemption calculation in case they are de minimis.

Do they have any other properties in their portfolio?
Why is the business registered for VAT?

Presumably they have some commercial property that is VATable or make some other type of taxable sales, else why are they VAT registered?

Partial exemption applies when a VAT registered business makes an exempt sale (commercial property is an exempt sale), so yes, partial exemption applies.

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