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Where Taxpayers and Advisers Meet

VAT on property query

Herbs16
Posts: 69
Joined: Wed Aug 06, 2008 3:53 pm

VAT on property query

Postby Herbs16 » Mon Feb 29, 2016 1:26 pm

Hi forum
hope someone can help and clarify my queries please..


If you build a property (residential) with a view to selling you can claim the VAT back, sale is zero rated supply so no VAT to pay?

If you build with a view to renting, your supply is exempt and so no VAT recoverable OR VAT chargeable on the rental income?

So, if you build and then sell to your children, is this allowed to claim back all the build costs for VAT purposes, have no VAT on the sale?

many thanks

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: VAT on property query

Postby section 44 » Mon Feb 29, 2016 1:35 pm

If you build with a view to renting, your supply is exempt and so no VAT recoverable OR VAT chargeable on the rental income?
the former
So, if you build and then sell to your children, is this allowed to claim back all the build costs for VAT purposes, have no VAT on the sale?
Yes. Children cannot legally own property so an adult would need to be a nominee for the children - this might complicate the analysis.

Herbs16
Posts: 69
Joined: Wed Aug 06, 2008 3:53 pm

Re: VAT on property query

Postby Herbs16 » Mon Feb 29, 2016 2:53 pm

So if the children are over 18, all good? Claim back VAT on development and gift to children as exempt sale, no VAT?

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: VAT on property query

Postby section 44 » Mon Feb 29, 2016 4:02 pm

Claim back VAT on development and gift to children
A sale at market value would be better. Clearly you would crystallise the direct tax on your development profit.
exempt sale, no VAT
Zero-rated


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