ivorystraws
Registered User
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mo3art said:AFAIK it's done when you set up a company and the property is held by the company for tax purposes. In order to sell the property, you are effectively selling the company and it's main asset - the property.
There is a stamp/VAT saving alright, but I'm not sure how much.
I wouldn't enter into anything like this without taking professional financial advice and tax advice, this would be well worth the fee.
I definitely wouldn't consider it for my PPR, if that's what you're thinking?
ClubMan said:Is [broken link removed] relevant in this context?
ivorystraws said:OK, I've got a lot of info now on registering for VAT for a property purchase but I still have two main questions;
1. I am purchasing a house with my brother so how do I go about registering for VAT... do we have to form a partnership? do the two of us register for VAT?
2. I've been informed that as my brother will be an owner occupier in the property but the other rooms will be let out, that registration for VAT will affect stamp duty payable on the property and will affect our Mortgage interest relief... can anyone clarify this fuurther for me please?
Any comments or feedback is most welcome.
ivorystraws said:.
An accountant told me also that since the new property will come fitted out that the VAT on the whole house could come to 21%, not the usual 13.5%... but since this is an area I'm not expert in at all, I just thought I'd get more than one opinion on this subject.
FOR STARTERS I WOULDNT BE PLACING TOO MUCH RELIANCE ON THAT ACCOUNTANT -- NO WAY 21% ON HOUSE. HE MUST BE THINKING OF THE "PACKAGE RULE" BUT THAT APPLIES TO GOODS NOT PROPERTY (i.e. BRICKS AND MORTAR), PLUS EVEN IF PACKAGE RULE APPLIES THE SIMPLE WAY TO GET OVER IT IS TO INVOICE DIFFERENT VAT RATED GOOD SEPARATELY.
GETTING VAT BACK IS TOTAL DODDLE, YOU COULD DO IT YOURSELF IN A STATE OF INEBRIATION - WOULDNT PAY TOO MUCH FOR THAT - PLUS YOU SAID THEY DO IT FOR "BUY TO LET", BUT THATS NOT EXACTLY YOU.
Anyway, my simplified view of your opinion and information which I've researched is;
1. If my brother doesn't live in the house, then we're liable for stamp duty at the VAT exclusive purchase cost of the property.
2. Since we are both FTB, I'm assuming we're still eligible for MIR
3. We form a partnership to register for VAT to be reclaimed on property
4. Pay VAT on rental earnings to the revenue
5. Invest in other property with VAT lump sum
How's that sound or should I just quit and leave things be ;-)
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