Archives May 2024

Case – Why it is important to understand whether a property is opted to tax for VAT purposes


Our client was buying land that the vendor thought was within the scope of an Option To Tax 

The Issue  

The addition of VAT to the sale price would make the transaction untenable, as the client would not be able to recover the VAT. 

How we solved it 

We reviewed documentation dating back to 2004, when the original Option to Tax was made to understand whether the scope of the Option had been fully defined. We also reviewed the VAT legislation that was in force at the time and identified arguments that would subsequently disapply the Option to Tax even if it had been in place. 

The Outcome 

We presented our arguments to the seller’s solicitors to enable the sale to proceed without a VAT charge being applied, a great outcome for our client. 

Next Steps

If you have a case similar to the one above and want an expert opinion please do get in touch

The post Case – Why it is important to understand whether a property is opted to tax for VAT purposes appeared first on Making the Complex Simple.


Case: Saving IHT when passing on wealth


We were approached by a client who was reaching her mid-70s and was considering how to tax-efficiently pass on her wealth to her family.


To do this, she needed to consider what her current exposure to Inheritance Tax (IHT) was, to then understand how much of her wealth could be passed on.

She then wanted to consider what planning opportunities were available to reduce that exposure and prevent her estate from growing further, before her death.

How we solved it

We gathered all the relevant background to understand her circumstances and what structures would be suitable for her to achieve her objectives.

We provided calculations of her current exposure to IHT.

We then provided recommendations based on her circumstances to reduce that exposure, including opportunities for making lifetime gifts, making strategic investments, will planning, trusts and the potential to set up a family investment company (FIC).

This included considerations of any beneficial exemptions and reliefs available to her.

The outcome

Due to our expertise we produced a bespoke advisory report on the opportunities available to her to reduce her potential IHT bill. If she were to implement the planning to its fullest potential, her IHT bill would be reduced from approx. £1,300,000 to £300,000, a tax saving of £1,000,000.

This ultimately would provide more of her estate left over for distribution to her family.

The advice gave her clarity on the actions she needed to take and the timings of those actions in order to implement the planning effectively.

Next Steps

If you need IHT advice then please do get in touch


Tax Partner Pro – Your Q answered. May 24

We have been supporting our Tax Partner Pro members via our email and call back service. Here’s an overview of some of the more recent questions we have answered during May 24.


My client is just about to acquire her first UK residential property.  She is UK resident, h owever she is already a 1/3 member of an LLP which owns a 1 mixed use property in Germany, but part is residential part commercial – this property was inherited from a German relative and put straight into a UK LLP.

Does she have to pay the 3% second home surcharge on her acquisition here or what would need to be the value of the residential portion in Germany to not pay it?

Does this make her ineligible for first time buyer discount on SDLT?


Our view is that the client would lose out on their first-time buyer’s exemption as they already have a share in a partially residential property. Even though this property isn’t in the UK, HMRC consider property owned anywhere in the world.

This would also mean that the 3% surcharge will apply as the client will be deemed to own another property and has another residential interest.


I have a question about travel expenses for my limited company client. It’s just one director and the services they provide are business coaching services. 

They mostly work from home (80% of their time) but occasionally they rent an office and deliver the sessions from there.

I’m not sure what will be the correct treatment for the travel expenses and whether these will be allowable for the corporation tax purposes in the situations where they travel from home (which is also their permanent place of work) to that rented office for some sessions. They sometimes buy lunch while performing their duties from that office.


As your client’s home is their permanent workplace, any time spent visiting offices to deliver training sessions from there will be classed as a ‘temporary workplace’.

 A ‘temporary workplace’ means that you attend the workplace for a limited duration or temporary purpose. If a director (or employee), is relocated to a temporary workplace from their regular base of operations (i.e., their home in this instance) for an extended period, the new workplace may still be classified as temporary if:

 a) It’s anticipated to last under 2 years;

b) It’s expected to last over 2 years, but they’ll spend less than 40% of their working time there.

 Any accommodation, food, and drink costs you incur whilst your client is working away from their permanent workplace are tax deductible for the company. It is important to note your client would need to ensure the costs are reasonable.


I have a question about SDLT – a client is buying a freehold block, with 7 flats in one single purchase for £341,000 so an average of £48,700 per each flat. I am not too sure on the Stamp Duty treatment of this, would it qualify for Multiple Dwellings relief or ‘non residential’ rates, due to the criteria: ‘6 or more properties bought in a single transaction’ based


Providing there is no headlease and none of the flats are subject to a long lease the purchase of the freehold is treated as if it were an interest in the individual dwellings. As such, this would be a relevant transaction for the purposes of MDR relief.

If the conditions are met, MDR can be claimed but in almost all examples like this, this higher rate for additional dwellings will apply.

If MDR can be claimed and the average price of each flat is £48,700 then only a 3% SDLT rate would apply.


Is it considered a supply and VAT chargeable and, subject to breaching thresholds, the trader  (a company in this case) would need to register?

They’re a finance broker and lenders pay a commission, my take is that their services are more consultancy and therefore a supply and should be registered. They’re saying others in the industry aren’t charging VAT – so wondering if there’s an exemption somewhere?


If it is a commission earned in the provision of a professional service then it would be VAT-able.

However, commission received by an intermediary in connection with financial services are exempt from VAT if the role of the intermediary is simply to make an introduction. i.e the bringing together a person seeking a financial service with a person who provides a financial service.

So it depends on the scenario…