Time to Check Out Implications of 20 Per Cent Vat ; Geoff Solman From Property Consultants Bruton Knowles in Birmingham, Examines How the Increase in Vat to 20 Per Cent Affects Commercial Property Transactions Across the Midlands

Birmingham Post › January 20, 2011

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Summary

For those who lease, or are looking to buy or sell commercial property, this month's VAT hike to 20 per cent could have an impact on your stamp duty land tax (SDLT) liabilities.

Now is a good time to reach for a calculator and check the tax implications for any commercial property transaction, where you are obliged to pay VAT. Failure to work out your liabilities correctly may mean falling foul of any penalty charges.A s is often the case with tax matters, things aren't straightforward; though the VAT rate increased on January 4, if you took a non-residential lease from July 27, 2010, and you pay VAT in addition to the rent, you may be under an obligation to submit a revised SDLT return to HM Revenue & Customs (HMRC). The amount of SDLT payable on nonresidential leases is dependent on what is called the net present value (NPV) of the rent. This is calculated by reference to the rent payable throughout the term of the lease and any VAT payable on the rent is included in the calculation.

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Time to Check Out Implications of 20 Per Cent Vat ; Geoff Solman From Property Consultants Bruton Knowles in Birmingham, Examines How the Increase in Vat to 20 Per Cent Affects Commercial Property Transactions Across the Midlands

For leases granted from July 27, 2010, HMRC requires the NPV to be recalcul...

See the full content of this document