I recently saw two clients who run a partnership, which is VAT registered, who were also considering purchasing an investment property together. I explained to them that if they did this, the rental income would be deemed as part of their VAT-able income and added on to that of the partnership.
This meant that they would lose approximately 17 percent of their rental income to the VAT man. This would therefore have a major impact on their investment yield.
We found a way around this to avoid the rental income being attached to the VAT income.
If you are a VAT registered business and considering purchasing an investment property, call Green and Peter before it is too late on 020 8446 8100.