My company is not VAT registered and, at the moment, only has residential rents as an income. If I buy an industrial estate in Manchester, can I buy it with this company but register for VAT beforehand? I understand VAT is not charged on residential rents but I need to claim back the VAT on the industrial purchase costs. I have no problem with charging tenants on the industrial estate VAT. 

Arthur Weller replies:  

You can do as you have written, i.e., register for VAT, opt to VAT on the industrial estate, then purchase the industrial estate, then reclaim your input VAT, and charge VAT on the industrial estate outputs. However, if the industrial estate is currently rented out, maybe you could continue the existing rental business and treat this as a transfer of a going concern (TOGC), and so not actually pay the VAT on the purchase. This would save stamp duty land tax on the purchase and also be good for cashflow. Additionally, it is worth asking the seller if it is 20 years since he opted to VAT. If the answer is ‘yes’, perhaps he can revoke his option to VAT before the sale and consequently not have to charge you VAT on the sale to you.