Question:
I am renting a commercial office premises, and am considering buying the property on freehold basis. The seller is VAT registered. However, because I am a sitting tenant could the seller opt not to charge me VAT on the purchase price?
Arthur Weller replies:
Even if the tenant is VAT registered, he may not have 'opted to tax' on this particular commercial property. You need to find out whether he has or not. If he has, then he will need to charge VAT on the sale whether you (the purchaser) are a sitting tenant or not. However, it is worth finding out whether it is 20 years since he opted to tax on this building. If it is, then there is a possibility that he can now revoke his option to tax, and not charge you VAT on the sale. See Public Notice 742A section 8.3.
