In forced sale of BTL property,how much does VAT man get?

I don't know the answer and I would agree that the VAT would have to be remitted to the Revenue (by the vendors solicitor) if it was charged and collected from the purchaser.

I would be surprised if the bank assume responsibility for the VAT in the case of an exempt sale (where no VAT is collected) or a cancellation of waiver of exemption prior to an exempt sale.
 
any update

zxcvbnm said:
Well that's it. In only guessing here - but I'm working on the assumption there is a legal requirement for the bank to pay the vat out of the sale.

Ots only guesswork by me (I will be getting legal advice)
But it's difficult to see how it would be otherwise.

I may be wrong of course.
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Im just looking up this same situation... property in negative equity, forced to sell and looks like same advice on the VAT. Had been advised by accountant that cost would come out of selling price but the bank has just refused this. Would be eager to get an update from you on what your bank decided. (We are with ebs - now AIB but still speaking with ebs team in there)
 
44brendan said:
Yes the bank will be accountable to pay any unpaid VAT from the sale proceeds. This is standard practise in all sales of re-posessed properties where a VAT element remains outstanding.
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What's the legal basis for this?
 
gurks187 said:
Im just looking up this same situation... property in negative equity, forced to sell and looks like same advice on the VAT. Had been advised by accountant that cost would come out of selling price but the bank has just refused this. Would be eager to get an update from you on what your bank decided. (We are with ebs - now AIB but still speaking with ebs team in there)
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OP here. I must say in very surprised by this. I've been told otherwise by my solicitor.
Does you solicitor not get the cash first upon sale ?
So surely you can instruct your solicitor to pay the vat man no?
 
Just to reiterate my earlier post. The VAT must be paid from the sale proceeds. This means that the Bank cannot sell the property without paying the outstanding VAT. If you require confirmation on this response please refer the issue to an experienced conveyancing solicitor.
 
@Brendan44,

So the solicitor puts a clause in the sales contract saying that the sale is exempt from VAT as it is the sale of "old" property and this will result in a VAT clawback under the Capital Goods Scheme and that this VAT liability will take precedence over the security holder.

I've not seen it in practice under the new rules.

I would agree that the VAT if paid by the purchaser could not be taken by the bank but that is not the case here.
 
zxcvbnm said:
OP here. I must say in very surprised by this. I've been told otherwise by my solicitor.
Does you solicitor not get the cash first upon sale ?
So surely you can instruct your solicitor to pay the vat man no?
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Normally your solicitor would give an undertaking to give the proceeds to the bank, you can't "instruct" him to do what you want.

So did you do a capital good scheme adjustment on the exempt sale or a cancellation of waiver adjustment in the end to deal with your VAT issue.
 
We have asked our solicitor and accountant to engage with the bank and will update you on progress. By the sounds of what you are saying though it seems like ebs have adopted the US insurance industry stance of refuse first and then only after lots of fighting, do what they are supposed to do!!
 
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