Solutions said:I have been investigating this for the last few months and wondered had anyone anyone had any problems reclaiming VAT back on their investment properties?
If you are considering doing this in the future I have discovered a more economical way of achieving it and am happy to share it with you if interested.
viztopia said:if only it was as easy as registering and de-registering every Tom, Dick and Harry would be at it. There are a some of people promoting this registering for vat to enable them to claim it back. you will find whoever is promoting it has a vested interest in the scheme.
liteweight said:It is extremely easy to register for vat.
liteweight said:There are a number of good reasons to register for vat. The vat repayment can be utilised as interest free loan, perhaps as deposit for next investment property. Although you have vat repayments to meet, income tax is charged on net income and so there is a saving on income tax. When it comes to resale then you simply de register before selling but of course Rev will look for balance of money due to them.
Niall M said:you save on income tax.... but it costs you more, for example:
Vat Registered
Rent 121
Vat to be paid: 21
Income Tax say 42%: 42
Net income: 58
Unregistered
Rent 121
Vat 0
Income Tax say 42% 50.82
Net Income: 70.18
northdub said:I registered for VAT to claim the vat back on a property. You have to be make sure you send in your VAT returns every 2 months ( I found this a pain). I decided to sell the property and deregistered a couple of months before I sold. I paid back the outstanding VAT balance (original VAT at the pruchase price - payments made since registered).
My accountant took care of the deregistering but I can't remember it being complicated. If I had waited to payback the VAT at the sale stage of the property, the VAT clawback would have been based on the sale price, rather than the original purchase price.
northdub said:I registered for VAT to claim the vat back on a property. You have to be make sure you send in your VAT returns every 2 months ( I found this a pain). I decided to sell the property and deregistered a couple of months before I sold. I paid back the outstanding VAT balance (original VAT at the pruchase price - payments made since registered).
My accountant took care of the deregistering but I can't remember it being complicated. If I had waited to payback the VAT at the sale stage of the property, the VAT clawback would have been based on the sale price, rather than the original purchase price.
northdub said:If I had waited to payback the VAT at the sale stage of the property, the VAT clawback would have been based on the sale price, rather than the original purchase price.
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