Readers’ forum: Can option to tax be revoked?

Our client a newly established company came across an offer to purchase a commercial property with a tenant in situ for £0.5m. The deal is attractive but for it to work the sale had to be completed immediately leaving no time for due diligence etc. There was uncertainty as to whether the seller an unconnected limited company opted the property to tax (or if they were registered for VAT).

Given the tight timeframe it was not possible to verify the seller’s/property’s VAT status prior to the purchase. One of the conditions imposed by the seller was that our client applies for VAT registration exercises an option to tax the property and applies for the transaction to be treated as a transfer of going concern (being a standalone property rental business). The sale was completed on 1 March 2023 and...