I am preparing the accounts for my brother, a joiner by trade, for 2007. During the period he bought an old second hand house for the purpose of development and subsequent resale. It is unsold at the end of 2007.
My understanding of the vat rules is that he was able to reclaim vat on purchases made in the development of the property,(which he did), and he will have to charge vat on the sale of the property, when it eventually sells.
My question is, was he able to reclaim vat included within the purchase cost on the purchase of the property? I assume not, as it was purchased from a private individual.
thanks in advance
My understanding of the vat rules is that he was able to reclaim vat on purchases made in the development of the property,(which he did), and he will have to charge vat on the sale of the property, when it eventually sells.
My question is, was he able to reclaim vat included within the purchase cost on the purchase of the property? I assume not, as it was purchased from a private individual.
thanks in advance