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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5016
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Ive reached an agreement to buy a pub for £130,000.00 (one

Customer Question

I've reached an agreement to buy a pub for £130,000.00 (one hundred and thirty thousand pounds) plus vat. If I decide to sell one of the shops or one of the residential flats , do I have to charge vat on the asking price , and on any of the rents ? Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.

Hello and welcome to the site. Thank you for your question.

If you have opted to tax, then the commercial property would be at taxable supply and you should charge VAT on the asking price. The residential flats would be exempt.

The same would apply to rental income from the shops and/or flats.

More information on this can be found here -- look at paragraph 3.10 - Building to be used for both commercial and residential purposes
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000158&propertyType=document#P256_28146

I hope this is helpful and answers your question.

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