Buying a property VAT exempt can also make life a lot easier if you’re converting for business purposes for a number of reasons, including cashflow but also it helps to avoid certain situations where you might have to adjust the amount of VAT you’ve claimed in future years. A link to reset your password has been sent to: Please log in or register to access this page. To continue using Tax Insider please log in again. This is letting as a dwelling on a lease or term of less than five years. Unfortunately, it’s not that simple. The conversion would only be eligible for a DIY Refund scheme claim if the properties were unoccupied under the 10 year rule. Residential utilities such as drainage, water, electric facilities. The availability of a tax break for such conversions makes this an attractive proposition. View the, Class ZA – Demolition of buildings & construction of new, Class AA – New flats on detached commercial buildings, Class AB – New flats on terraced commercial buildings. The balancing charge cannot exceed the allowances (initial and WDA) given in respect of the flat. Private Residence Relief: When HMRC’s Arguments Were Off Target! However, converting a property into flats for financial gain is not the sole preserve of the property developer. This is further backed up by the high court judgement in Main v. Secretary of State for the Environment (1999) 77P & CR 300. For more information about how Cornerstone Commercial Finance can help your business, speak to one of our expert advisers. This is an introductory guide and is not a definitive source of legal information. The capital sum paid for the grant or, if less than the commercial premium, the commercial premium. a “non-residential conversion”. ”. Nothing on Planning Geek, training or mentoring services constitutes legal or other professional advice, and must not be relied on as such, and it is your own responsibility to ensure that any information discussed is right for your circumstances. were able to successfully transform this historic commercial property into a modern home. Where the flat is an asset of a property rental business (which will be the case if it is let as a buy-to- let property), effect is given to the allowance as if it were an expense of that business. You would need to apply for planning to convert the shop to a residential unit. This is a building in respect of which the following conditions are met: The conversion or renovation work must result in a qualifying flat. Joe Green and Natasha Stroulger were able to successfully transform this historic commercial property into a modern home. Although the property didn't have planning permission at the time of sale, with a bit of research on the area and logical rationale, it was very likely that they would obtain planning permission for the development. The shift will be tough but it will be rewarding to see how a once unloved property go back to its former glory while you earn …