VAT and the Property Contract

Question 1

What is output tax for VAT?

Answer 1

What the business has charged

Question 2

What is input tax for VAT?

Answer 2

The VAT that a business pays for

Question 3

Who is a VAT taxable person?

Answer 3

• £85,000 more turnover
• Voluntarily sign up

Question 4

What is VAT exempt in Property?

Answer 4

1) Residential property (except newly constructed)
2) Commercial property over 3 years old (option not to tax)

Question 5

What are standard-rated supplies in property?

Answer 5

Newly constructed commercial property (less than 3 years old)

Question 6

What are zero-rated supplies?

Answer 6

Newly constructed residential property is zero-rated supply

Question 7

What is VAT position on newly constructed residential property?

Answer 7

Buyer doesn’t pay VAT, but seller can recover input tax

Question 8

What happens if seller opts to tax property that is over 3 years old?

Answer 8

Subsequent sale is standard rated – any tenants after will pay VAT on their rent

Question 9

What does SCPC provide by default on VAT?

Answer 9

That the property is standard-rated

Question 10

What is a Transfer of a Going Concern?

Answer 10

Seller using property as rental, and so will buyer, means exempt from VAT