interest free loan from the VAT man?

[legallady]

does anyone know about this?all I know is if you register as a sole trader and buy a new build as an investment, the VAT man will give you a VAT refund that will be clawed back through VAT on rent...has anyone done this? thanks

 

[liteweight]

Lots of threads on this already. You can't do it anymore now anyway but do a search of the forum.

 

[simplyjoe]

Where are these treads

 

[setemupjoe]

if you own any other investment properties you will also be liable to charge and return vat on those too,which would be crazy.and you may be liable to charge vat on disposal of the asset and deduct what you paid over the years,leaving you with possibly a headace !revenue dont like this way of purchasing investment property and you could be stung in the future with new legislation.i know its tempting but ive been advised by a top tax consultant not to go this route.

 

[Rhino 1]

Still worth a go i think, can avoid the vat on the other propeties by putting through a company

 

[setemupjoe]

a world of troubles my friend

 

[simplyjoe]

Still worth a go i think, can avoid the vat on the other propeties by putting through a company

A lot of bother for a small saving on interest. This scheme was set up to make a few quid for the people promoting it who are charging exorbitant fees. If you are married you can avoid the rent being applied to other investment properties by buying this property in both names or by putting the other properties in joint names - creating seperate legal entities.

I however agree with the other posters - more trouble than it is worth. Much more preferable to get a good mortgage broker to squeeze your lender for a better rate - get cheaper bank.