Tax can play an important part in many property transactions, from multi-million pound city centre re-developments to the purchase of a family home. Geldards can assist in ensuring that tax has not been ignored when planning a property transaction.
Geldards can provide tax assistance on commercial property transactions when the impact of VAT on the transaction can be very important. We can advise on the question of ‘opting to tax’ and charging VAT on the sale of land or the grant of a lease. In many cases, the transaction may qualify as a transfer of a business where no VAT may be payable. The TOGC rules can provide some technical difficulties which we can lead you through to minimise the amount of VAT.
Commercial property transactions can also trigger large stamp duty liabilities with Stamp Duty Land Tax (SDLT) payable in England and Land Transaction Tax (LTT) payable in Wales. We can advise on both SDLT and LTT and whether it is possible to reduce the amount of SDLT and LTT through claiming reliefs on company group reorganisations, purchase by a charity or a housing association or appropriate structuring of the transaction.
Andrew Evans was a member of the Welsh Government’s Tax Advisory Group which assisted Welsh Government with the design and implementation of LTT. Andrew contributes to legal publications and articles on LTT.
We can also provide advice on the capital allowances implications of the sale and purchase of commercial property and the impact of making capital allowances elections. We work closely with surveyors who can provide a detailed breakdown of items within a commercial property which may qualify for different rates of capital allowances.
The rates of SDLT and LTT are higher for residential property compared to commercial property. We can provide advice on whether it is possible to reduce the amount of SDLT or LTT on a transaction through claims for Multiple Dwellings Relief (MDR) or mixed use (buying a residential house with commercially used land, such as a farm or commercial woodland). Claims for MDR and mixed use can be complicated and subject to frequent challenge by the tax authorities due to the large tax savings that can result from a valid claim.
We can provide SDLT and LTT advisory services to clients and their conveyancers on the SDLT and LTT specific elements of their property purchase where the conveyancers are unable or unwilling to provide the advice in a complicated area of tax.