Taxation logo taxation mission text

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

Readers’ forum: Change from commercial to residential

29 April 2024
Issue: 4934 / Categories: Forum & Feedback , Land & property
Failed plans

I have a client who bought a commercial property in a limited company (HH) to convert into a wedding venue. The purchase price was £200 000 plus VAT and the company claimed input tax because of a link to intended taxable sales ie wedding fees. My client did not opt to tax the company’s interest in the property with HMRC.

However the company has failed to get planning permission and the director now wants to demolish the property and build two new luxury homes which he has been told he would get planning for without any problem. He intends to sell one house on the open market and keep one himself. Does this mean the company can only claim 50% input tax on the cost of professional fees and building materials ie because he will live in one property himself (non-business) and only one will be sold (zero-rated...

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