option to tax togc

Tuesday, November 8, 2022 Edit

An Option to Tax arises only with commercial property or land and when you decide to sublet it or sell it on. Option to tax allows the conversion of this normally exempt transaction in the sale or letting of land and buildings into standard rated where a seller or landlord charges VAT on.

Application Of The Transfer Of A Going Concern Rules Taxation

If the purchaser opts to tax but say one day after the relevant date there can be no TOGC.

. Revoking an Option To Tax The cooling off period If an OTT has been. The landlord can recover VAT on expenses but must charge VAT on rents and on the sale of the building. This is known as the Option to Tax.

The area of VAT law which specifies the supplies of land and buildings that are exempt from VAT is Group 1 of Schedule 9 to the Value Added Tax Act 1994. This case concerned whether sales of four properties which the Appellant had opted to tax qualified as transfers of going concerns TOGCs. The property would be taxable anyway regardless of an option to tax for example the assignment of a.

If the landlord sells the building with. Assets must be transferred as part of the business and used by the purchaser with an intention to carry on the same kind of business both seller and purchaser. Sale treated as a TOGC when it is a taxable supply.

When VAT free TOGC treatment is applied to a taxable supply possibly as one or more of the TOGC conditions are. The option to tax is made on a property-by-property basis. Details of tax points here.

The relevant date in these circumstances is the tax point. The option to tax must be notified to HMRC before a supply has been made - that is to say before a tax point has been created which is usually the date of completion but can. If the transaction is to be treated as a TOGC the seller must be satisfied that the buyers option to tax is in place by the relevant date.

You should establish all the facts of the case and consider two things. However they are not going to opt to tax. Firstly you should make a judgment as to whether the taxpayer actually made a decision to opt at the relevant time.

They may therefore ask the buyer for. It would mean being able to reclaim all the value added tax VAT on the purchase of. The vendors solicitor is claiming.

Where the written notification of the option is sent to. Is it sufficient to have applied for opt-to-tax for TOGC to apply or do I need HMRC. A TOGC is VAT free but any input tax incurred is recoverable so this is usually a benefit for all parties.

The property would still be exempt because the option would be disapplied. So the decision to opt to tax one property does not make other property taxable unless another election is made for other. The option to tax by the purchaser must be notified to HMRC in writing no later than the relevant date and must apply from that time.

If the vendor has opted to tax a property then in order to acquire the property as a TOGC the purchaser must also opt to tax the property with effect from the relevant date. My understanding is that for there to be a TOGC of a let property both parties need to have opted to tax. Seller is VAT registered and has opted-to-tax so I am putting this through as TOGC.

Option To Tax Extension Of 30 Day Rule