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The incorporation of a residential property portfolio could save VAT.
KEY POINTS
- Give form VAT1614D to the seller to exempt sale price from VAT.
- Some building services may qualify for VAT at 5%.
- Advantages of selling the converted property to a connected business.
- Ensure the taxable sale qualifies as an economic activity.
Over the years I have advised many clients to transfer property ownership to a different legal entity because of a VAT challenge. But I have always cautioned that the direct tax and stamp duty land tax consequences need to be considered as well.
As a result of reading Peter Rayney’s article ‘Opportunity knocks’ (Taxation 14 July 2016 page 12) about incorporating a residential property portfolio business I understand these issues a lot more. But direct tax will always be side B of the record...
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