My wife and I are buying 10 acres of agricultural land, which the seller is charging VAT on.
We therefore plan to buy it through our Limited company, which is VAT registered, in order to reclaim the 20% tax.
My questions are:
- If we received planning permission for a residential dwelling on the land, would we have to sell that part of the land back to ourselves as individuals, or be forced to charge ourselves rent via the company? Or can we live on the land rent-free, as long as the company owns the house?
- If we sold the land after 1 or 2 years, would there be any requirement to pay back the VAT we reclaimed or sell the property at a value higher than the purchase price?
- In order to keep HMRC happy, is there a requirement to have X amount of income going into the company? e.g. If the company made no taxable revenue after the purchase of land and reclaiming of tax, would this break any rules?