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VAT option to tax

VAT option to tax

Hi, wondered if anyone could quickly confirm something for me. If a SIPP purchases a commercial property to rent out and VAT has been charged on the basis that the vendor opted to tax am I correct that I can register the SIPP and make the option to reclaim the VAT anytime within 3 years or do I ned to register and opt immediatley ?

Many thanks for any thoughts.


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05th Dec 2012 11:00

SIPP and option to tax

If the Vendor has opted to tax, then he will charge VAT on the sale to the SIPP. The SIPP cannot reclaim that VAT until he (1) registers, and (2) opts to tax.

The transaction could be structured as a TOGC, which would mean the SIPP has to opt before completion on the sale.

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05th Dec 2012 13:50

To follow on from Les

If the SIPP does not opt immediately, and makes exempt supplies, that may cause a problem with subsquent option

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