Commercial property - tax queries for partnership

S

stoner

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I am considering going into parnership with two others to purchase a warehouse approx E800,000, with a long term tennant and mortgage already guaranteed.
Just wonderiing if anyone has any experience or advice on the following: company we're buying from and renting to are vat registered so obviously we will be registering for vat. I'm a bit confused on paying Vat on the purchase claiming it back etc, and tax on rental income of a commercial propertyand if vat is tied up in this computation.
 
Re: commercial property - tax queries for parnership

It's a very complex area and you must take professional advice.

It's not at all obvious that you should register for VAT. I am not sure that you will have to pay VAT on the purchase of the second hand property. If you do have to pay it, it would make sense to register if that allows you to reclaim it.

If you register for VAT, you will probably have to charge VAT on any other property that you own. Tenants would not agree to this, so effectively, you would have to pay the VAT yourself which would reduce your net rental income by around 17%.

The fact that you are a bit confused means that you absolutely must take advice on it.

Brendan
 
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