I Understand That The Vat Rules Now Provide For An Option To Tax My Entire Property Portfolio. How Will This Work And What Are The Benefits?

摘要

This is one of several recent changes to the VAT rules applying to property.Ordinarily, a supply of property -for example, under a lease - is exempt from VAT. This means that the supplier - the landlord - cannot recover VAT on supplies made toit, such as any construction services.The rules have always allowed businesses to 'opt to tax' specified property. The rationale for opting to tax, so that the lease is subject to VAT, is that the landlord will then be able to recover VAT on supplies it receives, and, as long as the tenant makes supplies that are all subject to VAT, it will be able to recover the tax charged on the lease and so should not be out of pocket.Under the new rules, businesses will also be able to make a 'real estate election', that covers all properties it acquires in the future. These automatically apply an option to tax at the time of acquisition.