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VAT on sale?
Our client owns a property portfolio consisting of residential and commercial properties that are rented out.
He is planning to sell one of the properties but we are uncertain as to the VAT treatment. The property to be sold consists of a ground floor shop which has a flat on the floor above and there is land to the rear of the building.
The shop and the flat have been rented out separately for many years with VAT being charged on the shop rent.
Our understanding is that the purchasers of the property intend to keep the flat but to convert the shop into another flat. They then intend to build a new residential property on the land.
Our question is whether our client needs to charge VAT on the forthcoming sale of the property.
We hope readers are able to clarify...
