17 September 2020

VAT and commercial real estate deposits: Elizabeth Small writes for Taxation

Tax Partner, Elizabeth Small’s article entitled ‘Tax charge on non-consumption?’ was published in Taxation. In her article, she discusses the VAT complications that can arise with deposits on commercial real estate transactions.

Elizabeth explains that ‘VAT is an ever-changing area of tax law but some inalienable foundations seem to be shifting. It started as a tax on consumption, so it is interesting to note that VAT in this context has become a tax on non-consumption’.

To further understand the tax charge on non-consumption, she highlights the following five key points:

  • Time of supply on a freehold sale of commercial property.
  • HMRC statements on forfeited payments.
  • Increased risk of forfeiture on purchase contracts.
  • VAT on a deposit forfeited on an opted freehold.
  • Buyers may be asked to pay VAT on deposits.

Read the full article here.

Our Insights

“Dearbhla Quigley is an experienced capital markets practitioner who is frequently called upon to advise companies on admission to AIM. Dearbhla has very wide experience of AIM and is commercial and detailed."
Chambers UK 2021
×