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Commercial, commercial property, Lease    No Comments

I often get asked about VAT on commercial properties. Commercial properties are exempt from VAT however this exemption can be waived.

It is important for a tenant to check at the early stages of the lease negotiations as to whether or not VAT  is payable. If it is then VAT at the appropriate rate will be payable on top of the rent. If the tenant is registered for VAT this is not much of an issue it will just effect cash flow in that the tenant will have to pay the VAT out and then reclaim the VAT payment back. The problem is when the tenant is not VAT registered as they will pay VAT on the rent and will not be able to claim it back.

There is then the additional problem in that even if VAT is not payable when you initially tkae on the lease it could become payable during the term of the lease as the landlord can opt to charge VAT on the property at any time.

Is there anything the tenant can do?

Yes. In the initial negotiations if VAT is payable and the tenant is not VAT registered they can try and negotiate a lower rent

If the VAT  is not payable at the start of the lease and the tenant wants to ensure that this remains the same throughout the term of the lease, then the tenant can try and  negotiate that a clause be included in the lease to state that during the term the landlord will not opt to charge VAT.

Any landlord realistically will wish to avoid both of the options above this is why it is important for a tenant at the early stages of negotiations to instruct a solicitor so that the tenant is aware of all the options available to them and  to ensure that they negotiate the best rental terms.

If you are a tenant and are thinking of taking on a lease please feel free to call me on 01623 663244 and I would be happy to assist with any enquires.

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Commercial, commercial property, Property, purchase, Uncategorized    No Comments

development land

When we are acting for developers who are purchasing a piece of land quite often mines and minerals will have been excepted.

If the mines and minerals are excepted this means that someone else has the rights to mines and minerals in, on or under the land. The risk to the developer is that the owner of the reservation of mines and minerals may allege that the foundations of any development may amount to trespass.

If you identify that the land if subject to any such reservations then the first step is to get as much information as possible about the reservation top see how they affect your planned use, such as at what depth of the mines and minerals that are reserved.

If land that you are planning to develop has rights to mines and minerals reserved then there are a number of ways to address the matter:-

1. obtain indemnity insurance, the indemnity insurance will not remove the reservation but it would mean that if a claim is made for trespass and /or access for works then a claim for losses can be made under the policy;

2. that you contact the minerals owner to ask whether they would be minded to sell their rights. Any approach to the owner of the mines and minerals should be considered seriously beforehand as once you make contact with the owner you will be prevented from obtaining indemnity insurance.

If you are a developer and have a question on mines and minerals then please do not hesitate to make contact with Christie Limb on 01623 663244.

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commercial property, Commercial property sale, Tenancy Deposits, Uncategorized    No Comments

 

 

The first step is that you will need to check that the lease can be passed to another third party. Look at the terms  the lease for the assignment of lease clause. Most leases allow for the assignment of the whole, very few allow for the assignment of part of the property.

The assignment clause will generally require that the landlord’s consent to the assignment is obtained. The landlord and you, as the outgoing tenant, will want to ensure that the tenant coming in is off suitable financial standing to pay rents etc. The landlord may put conditions on the licence to assign including:-

1. that you as the tenant passing the lease on, enters into what is called an AGA ( Authorised Guarantee Agreement). This in basic terms is an agreement in which you as the tenant passing the lease on, guarantees that the incoming tenant will comply with the terms of the lease;
2. the landlord will ask that you pay his fees and his surveyor’s fees for  the licence to assign;
3. the landlord if he is not completely satisfied that the incoming tenant is of suitable financial standing may request that the incoming tenant pays a rent deposit.

When you are looking to pass the lease onto a new tenant it is important that you take legal advice at an early stage. I have lots of experience in such matters and would be happy to assist with any questions you may have and if you decide to instruct would provide you with a fixed fee quote for the work.

Christie Limb

climb@fidler.co.uk

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business, business purchase, Buy to let, Commercial, commercial property, Property    No Comments

income tax

 

Tax Tax Tax

 

Completing your tax returns? This time of year always brings to light the amount of tax that you are paying. If you are looking at pension and tax efficiencies then I urge you to consider investing in a commercial property via a pension scheme such a SIPP (self invested personal pension) or a SSAS (small self administered scheme).

 

There are a number of tax benefits for investing in a property by a SIPP and SSAS including:-

 

– growth is free from CGT

 

– tax relief at the individual or company’s highest rate

 

– rental income received by a pension scheme attracts no UK income tax

 

– on retirement 25% of the pension fund can be paid as a tax free lump sum

 

– on death before retirement the whole payment under the pension fund could be paid as a tax free lump sum i.e. no inheritance tax

 

If you need any advice on commercial property please call Christie on 01623 663244.

 

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Buy to let, Commercial, commercial property, Conveyancing, Landlord, Property, property owner    No Comments

buy to let

 

With the increase in stamp duty on the horizon for residential buy to lets you might want to now consider investing in commercial property as buy to let. The benefits of buying as commercial buy to let over residential include the following:-

– generally commercial property generate higher rental income;

– a commercial lease provides the landlord with greater protection and swifter enforcement provisions;

– commercial tenants are generally required to meet the insurance costs of the property and also all of the repairs;

– the term for commercial leases are usually for longer avoiding the landlord agents fees for re marketing and also solicitors fees for drafting new leases;

– the rent reviews provide for the rent t remain the same or are upwards only

– it is possible to claim capital allowances on commercial properties

 

If you are thinking of buying a commercial property to let then please contact me on 01623 663244 or email climb@fidler.co.uk, I would be happy to assist  with the transaction.

 

 

 

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Commercial, commercial property, Lease, Uncategorized    No Comments

blog image commercial building

 

If you own a commercial property or are thinking of investing in a commercial property with a view to letting the property out you should consider investing by way of a SIPP or a SSAS.

 

A SIPP stands for Self Invested Personal pension and a SSAS is small self administered scheme.

 

My clients who have invested through such pension schemes already either own the property and let it to their company or are buying it with a view to letting it to their company. What happens then is that the rent from their company is invested into their pension scheme.

 

The benefits of investing through a SIPP or SSAS include:-

 

– contributions into the scheme receive tax relief

– the rent received by the pension scheme is not subject to income tax

– the property when sold has not capital gains tax liability

– in most circumstances there will be no Inheritance tax liability on death

– the ownership of the property prevents the pension being an asset that could be claimed in bankruptcy

 

If you are thinking of investing in a commercial property by way of a SIPP or a SSAS I would be happy to handle the legal part of the transaction for you at a fixed fee price. please feel free to call me on 01623 663244

Christie Limb

Partner

 

 

 

 

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Commercial, commercial property, Conveyancing, Uncategorized    No Comments

imagesCAX34LB7Investing by SIPP and SSAS

 What are they?

A SIPP is a self invested personal pension and a SSAS is small self administered scheme.

Why are they of interest?

They provide for some a tax efficent way of investing.

Why look at investing by way of a SIPP or a SSAS

– growth is free from CGT

– tax relief at the individual or company’s highest rate

– rental income received by a pension scheme attracts no UK income tax

– on retirement 25% of the pension fund can be paid as a tax free lump sum

– on death before retirement the whole payment under the pension fund could be paid as a tax free lump sum i.e. no inheritance tax

The difference between a SIPP and a SSAS

SSAS

small occupational pension scheme set up by the directors

– members are usually employees or directors of the employer

– each member has a a notional share of the SSAS funds

– more flexible on investment

– can lend to the company

SIPP

SIPP is a personal pensions set up by an insurance company or specialist SIPP operator.

– open to anyone

– usually a minimum fund size

-There are usually higher running cost

 

Christie Limb

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Commercial, commercial property, Landlord, Lease, Uncategorized    No Comments

I often get asked about VAT on commercial properties. Commercial properties are exempt from VAT however this exemption can be waived.

It is important for a tenant to check at the early stages of the lease negotiations as to whether or not VAT  is payable. If it is then VAT at the appropriate rate will be payable on top of the rent. If the tenant is registered for VAT this is not much of an issue it will just effect cash flow in that the tenant will have to pay the VAT out and then reclaim the VAT payment back. The problem is when the tenant is not VAT registered as they will pay VAT on the rent and will not be able to claim it back.

There is then the additional problem in that even if VAT is not payable when you initially tkae on the lease it could become payable during the term of the lease as the landlord can opt to charge VAT on the property at any time.

Is there anything the tenant can do?

Yes. In the initial negotiations if VAT is payable and the tenant is not VAT registered he can try and negotiate a lower rent

If the VAT  is not payable at the start of the lease and the tenant wants to ensure that this remains the same throughout the term of the lease, then the tenant can a negotiate that a clause be included in the lease to state that during the term the landlord will not opt to charge VAT.

Any landlord realistically will wish to avoid both of the options above this is why it is important for a tenant at the early stages of negotiations to instruct a solicitor so that the tenant is aware of all the options available to them and  to ensure that they negotiate the best rental terms.

If you are a tenant and are thinking of taking on a lease please feel free to call me on 01623 663244 and I would be happy to assist with any enquires.

 

Christie Limb

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commercial property, Conveyancing, Conveyancing Quote, Property, Property Market, property owner, Property Report, property searches    No Comments

Caveat emptor. An old Latin phrase well known to us property lawyers!  Roughly translated it means ‘Buyer beware!’.

In the modern world when everyday purchases of goods are heavily protected by wide ranging consumer laws, it is easy to overlook this long standing principle, but it is still very much in force when buying  land or property as demonstrated in the recent high profile case of Hardy vs Griffiths.

 

Forsale

The case involved the purchase of a property for £3.6 million.  The buyers proceeded to exchange of contracts (the point in the transaction when they legally committed to buy the property) without the benefit of reading the results of a building survey.

The survey actually highlighted that the property suffered from damp and rot.  On discovery of this the buyers attempted to pull out of the purchase on the basis that the state of repair of the house had been misrepresented to them in replies to enquiries  given by the seller.  The sellers issued court proceedings for breach of contract over the buyer’s refusal to continue with the purchase.

 

The court found that the sellers had not attempted to hide the damp and act fraudulently. The sellers simply answered the relevant question saying they were not aware of any damp or rot issues but that as it was an old property their reply could not be taken to be a warranty (a legal promise) as to the condition of the property.  The Court found in the sellers’ favour and ordered the buyers to pay the sellers the cost of the deposit agreed in the sum of £150,000 and damages for breach of contract of £210,000.

 

This high profile and rather expensive example serves to demonstrate that the rule of caveat emptor applies when purchasing property and land and that the buyer accepts the physical state of property at the time of exchanging contracts to buy it.  This not new law.   If you are purchasing property or land, the onus is very much on you to investigate, search and investigate some more so that it is clear exactly what you are buying!

 

For a fixed fee quote for acting on your behalf in any residential or commercial property or land transaction, call us on 01623 656200.

 

 

 

 

 

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Auctions, Commercial, commercial property, Property, Property Auctions, purchase    No Comments

auction hammer

If you are planning to sell a commercial property at auction you need to think about the following:
1. CPSE replies (commercial property standard enquiries) these are a list of questions like the property information forms on a residential property that provides potential buyers with important information about the property such as boundaries and maintenance,  planning, environmental matters.  The issues that seem to cause the most difficulty for sellers is planning and evidence of planning permission for use along with VAT and capital allowances. It is important for the buyer to know whether VAT is payable on the purchase price, likewise a buyer may be wanting to claim capital allowances and needs information from the seller to assess such.It is better to get these answered as quickly as possible as the sooner the more information the prospective buyers have on the property.
2. Searches , in properties not sold at auction the buyer will arrange for searches such as local, drainage and environmental  to be completed. When a property is being placed into auction I would advise the seller to provide as much information as possible to prospective buyers. I would also suggest that the seller request that the buyer pays back to them the cost of the searches.
3. If the property is subject to tenancies/lease copies of the tenancies/leases will need to be provided and referred to in the contract so that any buyer knows that the property is not being sold with no one in it. Further details of the rents paid and whether there are any rent arrears will be required
It is important with an auction property to get as much information together as quickly as so that you are able to attract as many buyers as possible.
I have lots of experience in dealing with commercial properties being sold at auction and would be happy to provide you with a fixed fee quote for the work.
Please feel free to call me on 01623 448302 or email me on climb@fidler.co.uk

 

 

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