Going concerns and VAT

Article Abstract:

No VAT is payable on the purchase price of a investment property if the sale represents the transfer of a business or part of a business as a going concern (TOGC). This will reduce the purchaser's stamp duty costs and benefit cashflow. The seller also derives a number of benefits from TOGC status, including the fact that it is possible to recover the VAT on costs associated with the sale as a general overhead on the business even where the property is unelected. There are a number of criteria for TOGC status, including the fact that the new owner must be registered for VAT at the time of the transfer.

Value-added tax, Going concern (Accounting), Going concern

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Taking allowances

Article Abstract:

The UK taxation policy regarding capital allowances can be complicated. It is therefore important those involved with property acquisition should have an understanding of the system. All apparatus used for a business is considered to be part of the plant and machinery. Landlords are able to claim allowances for residential housing larger than a single household and for commercial properties. Tenants may claim capital allowances on money spent on equipment, in order they can carry out their trade. The level of savings on tax can be as high as 40% in the first year for small firms.

United Kingdom, Analysis, Tax deductions, Landlords, Tenants, Tax policy, Fixed assets

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How to avoid your duty

Article Abstract:

It is possible to avoid paying stamp duty when disposing of a property by either executing offshore or selling the company that owns the property rather than the property itself. No UK duty is payable if a document is executed offshore. However, this approach is not appropriate for transactions registrable at the Land Registry. The other approach involves the transfer of a property into a single purpose vehicle company within the seller's group. No duty is payable if the single purpose vehicle company is a non-UK company and the share transfer is completed offshore.

Real Estate, Real Estate and Rental and Leasing, Real estate industry, Stamp-duties, Stamp duties

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