We are a university looking to enter into a new student accommodation transaction. This will involve the construction of a new accommodation block (with related facilities) that will be leased back to us for a 50 year term from practical completion. We have been told that because we would like to use the accommodation for conferencing over the summer it should be constructed as ‘cluster flats’ for VAT reasons. Please could you explain why this is and what the VAT issues are?
Answer
VAT will usually be the most important tax consideration on a new student accommodation project. You will mainly be using the completed property for making VAT exempt short-term lettings to students and so will be unable to recover VAT charged to you which is attributable to...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
We are a university looking to enter into a new student accommodation transaction. This will involve the construction of a new accommodation block (with related facilities) that will be leased back to us for a 50 year term from practical completion. We have been told that because we would like to use the accommodation for conferencing over the summer it should be constructed as ‘cluster flats’ for VAT reasons. Please could you explain why this is and what the VAT issues are?
Answer
VAT will usually be the most important tax consideration on a new student accommodation project. You will mainly be using the completed property for making VAT exempt short-term lettings to students and so will be unable to recover VAT charged to you which is attributable to...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
