stephen morris, partner, acuity essentials of property taxation - acuity legal and kilsby williams...
TRANSCRIPT
Stephen Morris, Partner, Acuity
Essentials of Property Taxation - Acuity Legal and Kilsby Williams18th September 2014
VAT/TOGC
• Freehold sale of commercial building less than 3 years old or not completed – standard-rated
• Sale or grant of lease of commercial building 3 years old or more – exempt subject to option to tax
• If Transfer of Going Concern, VAT not charged
VAT
Property Rental Business•Buyer to be VAT registered if Seller is taxable person and if standard rated supply, Buyer must elect to waive, notify HMRC and not revoke•Rental Business to be in place before and to continue for period after the sale•HMRC Notice 700/9 and HMRC Briefings 30/12 and 27/14
TOGC
• Occupational Tenant is only holding an agreement for lease and has not yet completed a lease
– Dartford Borough Council v Revenue & Customs (2007)– Notice 700/9
Members of the same VAT Group•Paragraph 4 of Notice 700/9•Transfer to same VAT group member is disregarded for VAT purposes•If seller or purchaser is same VAT group as the tenant, no TOGC•If seller or purchaser is same VAT group as one tenant but there are other tenants, may be TOGC
VAT/TOGC
VAT/TOGC
Lease is granted subject to occupational leases rather an interest transferred– Robinson Family v HRMC (2012)– Substance is important– HMRC Briefs 30/12 and 27/14
Stamp Duty Land Tax (“SDLT”)
Its application in overage agreements, lease variations
and option agreements
SDLT
Overage agreements
•Estimate unascertained or uncertain consideration and then reconcile – Sections 51 and 80 Finance Act 2003
•If not paid for 6 months, apply to Birmingham Stamp Office for deferment of payment – Section 90 Finance Act 2003.
SDLT
– Identity of purchaser– Location of land– Nature of the uncertain
payment– Amount of consideration for
which deferment is sought and SDLT that would be paid
– Details of when it will be paid • If application accepted,
additional SDLT payable 30 days from date consideration ascertained or ceases to be contingent
SDLT
• Rent variations– Within first five years of term– Review over five years –
abnormal increases before 17 July 2013
SDLT
Deemed surrenders and re-grants•Term of lease extended •Additional property added to demise•Overlap relief
SDLT
Option and pre-emption agreements•Acquisition of the right itself and exercise are separate land transactions•Potentially two notifications•Transactions may be seen as linked