Pub for sale

Tomjim

A friend of mine is looking at buying a pub which is currently leased to a tenant. Apparently the owner of the pub is in receivership.

My friend intends to lease the pub to the existing tenant.

The auctioneer has told my friend that he must be registered for vat in order to put a bid on the pub.

Is this true?

pedronomix

To make a competitive bid, he would need to be VAT registered as the sale price will be subject to VAT. If he is not registered he will have to suck up the VAT. The tenant will then only pay rent equivalent to the amount nett of VAT!! The auctioneer has obviously concluded that a non Vat regd punter is wasting everybody's time.

delahuntv

vat registraion is easy and simple - if the deal does not proceed, de-registration nis also easy and simple.

But as above - sale price will be +vat, so if pub sells for 200k, it will be 46k vat on top of that and if not registered, you don't get it back.

Alan Shore

OP your friend should seek professional advice. VAT on property is complicated and errors expensive.

There could be numerous issues.

The vendor it appears is looking for a purchaser who will elect for a "joint option to tax" an exempt sale.

http://www.revenue.ie/en/tax/vat/leaflets/property-guide/supply-of-property.html#s15

As the subsequent letting may be exempt in the absence of an "option to tax".

Seek professional advice.

Bicky

Sorry to drag up a thread but could someone explain why this property is subject to VAT.
Is it because the property has a tenant?

pedronomix

because it, like most other business premises, are subject to VAT on Sale price or on lease rentals.

dbran

Hi

Vat on property is a very dangerous animal and is not to be discussed on the forum even hypothetically.

If you want advice about VAT on property go speak to a professional and do not rely on uninformed comments on an online forum.

dbran