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Did you ‘opt to tax’ your commercial property?

Gary Hughes

Special Projects Manager
14/03/2019

Stamp Duty Land Tax (SDLT) can be a significant cost to a purchaser of commercial property. As the owner, you can make your property more saleable by revoking the ‘option to tax’ after 20 years. This reduces the SDLT payable, making the property more saleable. The scenario below illustrates the savings.

Scenario:

Stephen owns a commercial building which he ‘opted to tax’ over 20 years ago to recover the input VAT on additional construction costs. He has been approached by a property developer and wants to sell the building.

The property is valued at £3million. If the ‘option to tax’ remains in place the purchaser would pay £169,500 in SDLT. By revoking the ‘option to tax’ the SDLT would reduce to £139,500, saving the purchaser £30K. This could be used by the vendor to make the property more saleable and even negotiate a better price.

How Hallidays can help:

Our tax experts can review your current tax arrangements to advise you on how you can make your property more saleable and potentially increase the disposal value of your property. Please contact our team on 0161 476 8276 or email hello@hallidays.co.uk.

Disclaimer:

The information contained herein is of a general nature and is not intended to be received as formal professional advice. Whilst we endeavour to provide accurate information, there can be no guarantee that the information is accurate as of the date it is received, or that it will continue to be accurate in the future, due to legislative changes. It is therefore important that before you act upon any information contained herein you seek appropriate professional advice to take account of your exact circumstances.

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