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VAT exempt sale

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  • 22-02-2020 5:26pm
    #1
    JansheerKahn
    Registered Users Posts: 44 ✭


    Say Company A buys a run down property and reclaims VAT on the works to renovate same.
    The extent of the works do not render the property new for VAT so the subsequent sale is exempt.
    If no joint option to tax the sale exercised I assume the VAT reclaimed on the works (ie T2 Reverse charged VAT from subcontractors) should be paid back to Revenue as should not have been reclaimed in first place?


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    #2
    user.name
    Registered Users Posts: 283 ✭✭user.name


    Correct. As far as I'm aware (still stand to be corrected), the VAT on the refurbishment works doesn't concern the VAT on property rules. That and the option to tax etc. are only to prevent the clawback on VAT you paid on the purchase of the property. Assuming that isn't a concern and it wasn't subject to VAT on purchase, the VAT you paid on the repairs appears to have been reclaimed as a business expense. As renting is VAT exempt - your VAT recovery in this case is 0% so the VAT reclaimed will be clawed back.


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