Client operates as a limited company beneath the VAT registration threshold. Client also holds a commercial investment property personally - this building is opted to tax, as VAT was recovered when the property was purchased. So client is registered for VAT personally to account for VAT on the rental income
Client wishes to disincorporate the limited company and continue the business as a sole trader, but is concerned about the VAT implications. My understanding is that the option to tax can remain, such that the input VAT recovered on purchase does not become repayable, but the client could deregister for VAT personally as the rental income, plus the self employment income combined, would not exceed the VAT threshold.
Can anyone confirm that this is correct?
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