Land and buildings

Building and land transactions can be complicated. Our team has over 30 years' experience advising clients on the VAT implications of their transaction processes.

Land and construction

We have a wealth of experience advising in relation to the VAT implications associated with transactions involving land and buildings.

We advise clients across all areas of the supply chain, ranging from government departments and local authorities to private sector housing companies, property developers, residential care providers, housing associations, sub-contractors, and many more.

It is a complex area of VAT where the values are material and your understanding of the VAT position is critical to ensure that there are no unanticipated VAT (or SDLT) costs associated with the projects.

Structuring property transactions to remove or mitigate irrecoverable VAT costs.
VAT liability of land transactions and related supplies.
Scope to apply the reduced rate and zero rate of VAT to supplies.
Scope to opt to tax (OTT) and the OTT dis-application rules.
Treating transactions as a transfer of a going concern (TOGC).
Partial exemption and VAT capital goods scheme issues.
Agreeing VAT treatments with HMRC from the outset to minimise any potential risk of challenge in the future.
The VAT domestic reverse charge (DRC) for
construction services.

Our team of VAT specialists regularly advise clients in relation to:

How we've helped clients

Owner-managed property developer

The situation

The client transferred properties from a sole trader to a LLP and then to a limited company. The transactions were initially treated as Transfers of Going Concern (TOGC) and VAT was not charged. Due to an administrative error with the options to tax, the transfers of the properties did not qualify as a TOGC. Following an HMRC enquiry, HMRC assessed for output tax of £85,000.

The challenges

Our solution

We proposed an alternative approach to HMRC which removed the need to re-instate the LLP. We worked collaboratively with HMRC to agree that no further action should be required in the circumstances. No penalties were applied and no additional compliance costs were incurred by our clients. The £85,000 VAT assessed was not a cost and the client saved approximately £10,000 in professional fees.

How we've helped clients

Commercial and residential property trading group

The situation

Our client wanted to undertake a wide range of property development activities and needed support with designing a group structure. The aim was to provide an efficient and optimal tax position that managed and removed irrecoverable tax costs, whilst meeting the commercial objectives of the Group.

The challenges

Our role was to define a group structure that would minimise any tax leakage and provide sufficient flexibility to allow the group to undertake a wide range of different projects.

Our solution

We assisted the client in defining the roles and responsibilities of the trading subsidiaries and confirmed the VAT liabilities of the Group’s various income streams. We considered the practicalities and operational issues facing the Group and developed VAT efficient development strategies to deal with the challenges. We recommended a group structure that allowed the client to ensure that the fully taxable companies do not suffer any irrecoverable VAT costs. We retained the wholly exempt business activities in another group company, which did not register for VAT. This approach simplified the Group's VAT accounting obligations and removed the need for onerous partial exemption calculations to be performed. The structure provided the right flexibility to develop properties for sale.