Are you in the process of selling or about to sell the business premises? With such transactions there are always tax issues and the amounts involved can be quite significant.
The first complication to consider is, should VAT be charged on the sale?
This can depend upon a number of aspects, including whether input VAT was reclaimed on the acquisition or development of the property.
A second complication is that there may be tax on the uplift in the value of the property. Consideration needs to be given to whether this tax can be mitigated and whether any action is required prior to the sale? It may be too late to make some tax savings after the sale goes through.
Finally, it may be possible to increase the proceeds received for the sale of the property. If a claim for Capital Allowances on integral fixtures to date has not been made, then it maybe more beneficial not to claim the allowances in order to negotiate a higher selling price. The purchases may be able to claim allowances on a much higher figure than you ever could.
This may become a very important part of the sale negotiations. We would be delighted to discuss further how you can save tax on the sale of the business premises.
Extract taken from our 2011 Winter edition Tax newsletter – if you would like to subscribe please leave your details here.