Claiming VAT back and saving CGT on Conversion

by Readers Question

12:00 PM, 9th January 2014
About 7 years ago

Claiming VAT back and saving CGT on Conversion

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Claiming VAT back and saving CGT on Conversion

I am in a predicament and my accountant is confusing me even more. My husband and I have jointly owned a commercial property over 10 years of which ground floor has been let to retail business. The whole of the building is Vatable and we charge vat on the rent to the retail tenant. The upstairs had been empty offices for which we obtained planning permission to convert into 2 flats and have completed in September 2013. We want to keep the building as an investment tool but wish to sell the flats to my husband by creating leases and release the funds and save on CGT ( between spouses). We also want to claim the vat charged on the materials used for the conversion. My question is that can we claim the full vat on the materials and can I sell to my husband or anyone else without charging vat ? Am I correct in thinking that the flats are out of the vat region as soon as the conversion took place? My accountant is giving me conflicting answers and I am wary that the time to claim VAT back for the materials from HMRC is running out !

I would be grateful for any advice and suggestions to clarify this please. Claiming VAT back and saving CGT on Conversion

Any suggestions of an ace property accountant would be welcome too, we are based near Windsor.

Many thanks

Mrs Ramin


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Comments

Mark Alexander

12:09 PM, 9th January 2014
About 7 years ago

I don't know the answer to your question but I do think you are doing the right thing in respect of seeking a second opinion from another qualified accountant as this is no doubt worth a lot of money to you.

If you invest into getting a second written opinion there are two potential outcomes:-

1) It confirms that your existing accountant is right and gives you peace of mind.

2) It conflicts with your existing accountants advice and you are then left with a decision on whether to switch accountants.

My advice is to ensure that the accountant providing the professional opinion is insured and qualified to do so.

The link below is to the member profile of the accountant I use. They specialise in Property Taxation and whilst they are based in Norwich they act for clients worldwide providing they are UK property investors.

Link here >>> http://www.property118.com/member/?id=452
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