The dreaded VAT word!!
If you are selling or buying a commercial property or a property which was commercial but it is proposed that its use may change…whatever you do…make sure you know your VAT position.
We have acted for a number of clients who have bought a property subject to the payment of VAT because a previous owner elected to waive exemption. Years later they sell and completely forget that they need to charge VAT on the sale price. Fortunately in the past the standard contract provisions protect the seller so the seller could still recover VAT at a later date from the buyer. This is no longer automatically the case.
A recent ruling prevented the seller from claiming the VAT at a later date. This amounted to a very expensive mistake.
So try to avoid this risk by ensuring that you retain the records relating to your purchase. If we acted when you purchased we will double check the position for you. You can contact Tony Wilson, Partner on firstname.lastname@example.org or on 0207 802 4802.