A. The option to tax does not transfer from the vendor to the purchaser. Your client will have the choice as to whether or not to make an option to tax on the property. If they are using the property for making fully taxable supplies then they will be able to recover the input tax on the purchase of the property without making an option to tax. However, if in the future they make exempt supplies of the property for example selling the property, or renting out part or all of it to a tenant then there could be an adjustment to repay part of that input tax reclaimed either under the Capital Goods Scheme (if the property cost more than £250,000) or under partial exemption clawback. An option to tax does not have to be made at the time of purchase; the client could opt to tax the property later if they envisaged making an exempt disposal of, or rental of, the property.
If you have a VAT query why not contact the VAT Advice Line on 0844 892 2470 to discuss the implications. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
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