Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers' forum: The big tent

26 January 2016
Issue: 4535 / Categories: Forum & Feedback

VAT when a company purchases land and rents this to an associated company.

My client (A Ltd) rents a trading property from a third-party landlord. A separate landowner has given the director of A Ltd the opportunity to buy a plot of land next to the trading property. However the director would prefer to do this through a different entity – say B Ltd. This company will pay for surfacing and drainage on the land and will then buy and install a special tent which will be used by A Ltd for storage and possibly for some office use.

A Ltd will pay a commercial rent to B Ltd.

My concern is VAT. How can B Ltd reclaim input tax on the costs of the project which are likely to be £100 000 exclusive of VAT? Is an option to tax election necessary or will the income be standard rated by statute because it relates...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon