Two businessmen have formed a joint venture (JV) which has registered for VAT. The JV now intends to purchase the large office block which the vendor had opted to tax obtain planning permission to convert it to residential apartments and then sell it. However I’m told that the purchase could affect the JV’s ability to make taxable supplies and prevent the JV from recovering input VAT on its costs (i.e. the property professional fees etc). How so?
If the JV wishes to recover its input VAT it must take care over how it disposes of the property.
The default position for the supply of property is exempt whereas input VAT can only be recovered on purchases which are used to make taxable...
