Commentary

V7.377 Temporarily renting out new houses

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.377 Temporarily renting out new houses

Part V7 Tax planning | Commentary

V7.377 Temporarily renting out new houses

A common situation that has emerged in recent years is where new house builders (or builders of any new dwellings) have been unable to sell their properties because of the downturn in the property market. In such cases, they have often decided to temporarily rent out these properties to generate short-term rental income.

The challenge for house builders is that the sale of a new dwelling they have built is zero-rated as far as VAT is concerned (input tax can be claimed) but rental income is exempt from VAT (no input tax can be reclaimed

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