High levels of transaction activity have resulted in greater demand for advice regarding the sale and acquisition of land and property. 

The VAT implications of transferring land and property assets, particularly around the option to tax, can be challenging and are crucial to consider at an early stage to prevent VAT becoming an obstacle to the completion of deals.

HMRC delays

HMRC’s Option to Tax Unit are reporting significant delays (up to 12 months in some cases), even in relation to simple enquires such as requesting confirmation of whether land and property has been opted. In our recent experiences of dealing with the Option to Tax Unit, such delays show no sign of abating. 

Potential impact

Whether or not the option to tax has been elected can drastically affect the VAT position surrounding the transfer of land and property assets. As receiving information from HMRC is taking some time, it is crucial that the option to tax position is investigated at an early stage in the deal. Mitigating potential VAT risks can be achieved more effectively where the option to tax position is understood at an early stage.

Get in touch

If you require assistance with VAT queries concerning land and property, please do not hesitate to get in touch with myself, my colleague Alex Nicholson, a member of our VAT team, or your usual Johnston Carmichael adviser.