With VAT at 17.5% and stamp duty (on transactions above £500,000) at 4% knowledge of these taxes, their application to property and their inter-relation is central to any advice on a commercial property transaction.
For VAT, the requisite advice is provided by property practitioners who are well placed to anticipate the potential problems and propose practical solutions. Examples where advice is given include the application of the capital goods scheme, when and how to opt to tax, when an option can be revoked or disapplied, transfers of going concerns, rent apportionments, inducements for fitting out and transfers of VAT opted land to public bodies.
The increase in the rate of stamp duty has coincided with measures designed to reduce its avoidance. We advise clients on schemes that can still avoid or reduce duty, but always consider the value of the transaction to ensure that a scheme will be cost effective.
Some examples of recent work are:
- Tax advice on the purchase of a City of London prime office investment for over £200 million, including corporation tax, capital allowances, stamp duty, VAT and a complex group structure.
- Advising on tax, stamp duty and VAT on the purchase of a large London office investment involving a consortium of overseas investors.