VAT on shell only purchase

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    VAT on shell only purchase

    I am set to purchase a property that is being converted for residential use. The shell has already been stripped bare, and all permissions are in place, but construction will not be complete for 9 months or so.

    As part of the terms of the transaction, I must complete very shortly. Not yet having been inspected for residential use, commercial funding is required. Having posed a question about VAT, I now discover it may be payable on the entirety of the purchase, due to the technicality that it is effectively a commercial purchase at this time.

    The property is to be immediately leased back to the developer as show homes, but it will never be anything but residential, and is under construction for that purpose alone.

    This is a 7 figure purchase, and consequently the addition of VAT would cause the deal to collapse. The developer's solicitors are looking into the matter, but I'd also appreciate any wisdom here. Is there any way around this issue - I'm happy to provide further detail as required.

    Regards

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  • Reply to Damaged artwork expense
    by ram

    As per above, as the place is "part-furnished", which will not incude pictures on walls.

    It's a gift to a stranger. ( They are not family, not close friends - etc. ) and not a claimable expence in any way..
    ...
    25-09-2021, 16:05 PM
  • Damaged artwork expense
    by jtufty
    Hi all

    Silly minor question really. Last week the tenant accidentally knocked a framed picture off the wall and smashed it. It was only a cheap thing (I guess value was £10). I went out and bought a replacement picture for her. (I know I didnt have to, but shes a good tenant). I bought...
    24-09-2021, 10:35 AM
  • Reply to Damaged artwork expense
    by nukecad
    I'd see this as an altruistic gift to your tenant and leave it at that.

    My previous LL (although he had his faults) used to buy the 3 of us in his small HMO a £20 case of beer each at Christmas, I doubt he tried to claim it off tax.
    25-09-2021, 15:46 PM
  • Reply to Damaged artwork expense
    by jtufty
    Its let "part-furnished". (she didnt have a bed, so I put a bed in there, and the white goods, and the [now-broken] picture and a few other bits n bobs)...
    25-09-2021, 15:13 PM
  • Reply to Damaged artwork expense
    by Section20z
    You don't need to write anything. Retain the receipt and just include the appropriate amount in youR expenses/capital totals...
    25-09-2021, 13:57 PM
  • Reply to Damaged artwork expense
    by ram

    We assume the place is let as furnished ?

    I don't think pictures are classed as furniture / but then again, a mirror screwed to the wall - if broken by the tenant, then the tenant pays.
    So pictures ? not sure.
    I would charge the tenant the cost of replacement.
    ...
    25-09-2021, 11:43 AM
  • Reply to Damaged artwork expense
    by jtufty
    Thanks guys. I dont know what came over me! A momentary wave of altruism. Most unlike me!

    I have the receipt. What should I log it as? Should I literally just write "capital expense" or should I be more specific such as "replacement of broken picture"?
    25-09-2021, 06:45 AM
  • Reply to Damaged artwork expense
    by jpkeates
    It's a replacement item of furniture and its allowable as such.
    There's an inevitable element of betterment when you replace one thing with another.

    And £40 is neither here nor there as a capital item.
    24-09-2021, 13:16 PM
  • Reply to Damaged artwork expense
    by Section20z
    That sounds definitely like an improvement as you didn't have to splash out £50 you crazy dude.
    £10 down to repairs and £40 capital expense I reckon.
    24-09-2021, 11:59 AM
  • Let Property Campaign.
    by armour
    Hi all,

    A friend of mine has been renting out a flat since 2004 and has not declared any of the income to HMRC in all that time.

    She wants to come clean and pay the accumulated income tax she owes by making a non-prompted disclosure using the Let Property Campaign system....
    13-09-2021, 13:45 PM
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