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My client owns a commercial building which had an option to tax election in place for 21 years until it was revoked by my client in May 2018 under the 20-year rule. This is because the tenant is unable to fully claim input tax on his expenses so rent since May has been treated as VAT exempt.
However my client engaged a land professional in the summer and has paid him a substantial sum to secure planning permission on the property so that it can be sold and converted into apartments. The costs incurred to date are £100 000 plus VAT and my client has incorrectly claimed input tax on his August and November 2018 returns.
On the basis that the building will eventually be sold to a developer who can claim input tax should my client make a new option to tax election with a current date...
