LAND SALE

[David100]

I bought various plots of land in England between 2008-2011, which are registered at the Land Registry.The company I bought them from did not pay the VAT on the land and they since have gone into receivership . As I intend to sell these plots of land as I have been made an offer on them by a another company.
1. Am I due the VAT on the plots as I sell them on?
2. Am I due Stamp duty on the land?
3. Can this be paid from the Funds coming back to me on the sale of the land or does it have to be paid up front, which is what I am being told?
4.Any other considerations/problem I should look at?

[spidersong]

Unless the plots have been used to build either complete or incomplete homes, or are of commercial buildings completed within the last 3 years then the sale by you would be exempt from VAT (VAT Act 1994, Schedule 9, Para 1). This also assumes you haven't made an election to charge VAT under Schedule 10 of the VAT Act, which you would most likely only have done if you had any VAT to recover on the purchase of the land (or the construction of homes on the plots), and could only have done if VAT registered.

As to SDLT this is paid by the purchaser of the land and is paid directly to the government rather than through the vendor, so 2 is a no as well.

This means 3 is largely a non-question, since you won't be charging VAT (unless there are lots of material facts you haven't mentioned) and you also won't be receiving SDLT then you won't pay either of these taxes out of your receipts.

Other considerations might include Capital Gains Tax, or Income Tax/Corporation Tax liabilities depending on whether the plots have gained in value since bought and how and for what purpose you've held them (whether I means a person or your company and whether held for trading, development, investment etc.).

As land is one of the most expensive assets you can hold it does mean that making mistakes with its taxation can be one of the most expensive mistakes you can make as well, so it really would be worth talking to an accountant or specialist who can get all the relevant facts from you and getting paid advice on the best structures and timings for the deal.