BlueButton
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As we know, residential property investors are liable for income tax on all rental income received and for other additional charges, NPPR, PTRB etc.
I was reading this recent article / blog:
"We are all aware of the massive uptake in the property boom of people investing in holiday cottage schemes, hotel suite schemes, golf course accommodation schemes and residential/retirement home schemes. This was to take advantage of the suite of tax shelters available at the time and the belief that the rise in property values would not falter.
The result now is not at all as sweet as anticipated and many investors now find themselves in that unexpected situation where the investment could well develop into their worst nightmare of an exposure to a high, and unmanageable, VAT cost. This can happen for a number of reasons though it is essentially driven by the life expectancy of the investment scheme.
A number of the schemes are beginning to unravel and some are highlighting basic mismanagement of the scheme itself. In both cases the VAT risk largely lies with the investor, the majority of whom may well be oblivious to what is happening and may be too late in taking any possible steps to shore up their VAT position."
The article continues by saying those investors who have been identified as having a VAT liability have no choice but to contact Revenue to manage their potential ticking VAT time bomb and perhaps, just stop the clock.
Is this alarmist or are S23 holiday home investors liable to pay VAT subsequently if VAT had been paid as part of the initial purchase price / close of sale process?
I'd really appreciate your comments.
Bluebutton
I was reading this recent article / blog:
"We are all aware of the massive uptake in the property boom of people investing in holiday cottage schemes, hotel suite schemes, golf course accommodation schemes and residential/retirement home schemes. This was to take advantage of the suite of tax shelters available at the time and the belief that the rise in property values would not falter.
The result now is not at all as sweet as anticipated and many investors now find themselves in that unexpected situation where the investment could well develop into their worst nightmare of an exposure to a high, and unmanageable, VAT cost. This can happen for a number of reasons though it is essentially driven by the life expectancy of the investment scheme.
A number of the schemes are beginning to unravel and some are highlighting basic mismanagement of the scheme itself. In both cases the VAT risk largely lies with the investor, the majority of whom may well be oblivious to what is happening and may be too late in taking any possible steps to shore up their VAT position."
The article continues by saying those investors who have been identified as having a VAT liability have no choice but to contact Revenue to manage their potential ticking VAT time bomb and perhaps, just stop the clock.
Is this alarmist or are S23 holiday home investors liable to pay VAT subsequently if VAT had been paid as part of the initial purchase price / close of sale process?
I'd really appreciate your comments.
Bluebutton