5 November 2010 by

Duty Bound

The Chancellor of the Exchequer announced in this year’s budget that VAT will increase from the present rate of 17.5% to 20% with effect from 4 January 2011.

If the usual quarter dates are being used by Landlords then the first quarter affected by the VAT increase will be the March – June quarter as the tax date for the forthcoming quarter, commencing 25 December, precedes the introduction of the new rate.

Although the uplift in VAT may not affect the rent payable for the next quarter, Tenants should be aware that Stamp Duty Land Tax (‘SDLT’) paid on commercial leases where the term straddles this period may be subject to additional SDLT. Despite the Chancellor’s announcement in June 2010, H M Revenue and Customs (‘HMRC’) has only recently published guidance on this point.

Where the effective date of a lease (usually defined to be completion of the lease although it can also mean taking occupation if this is prior to the grant of the lease) occurs on or after 27 July 2010 then additional SDLT liability may become due as a result of the uplifted VAT rate. Where leases were completed prior to 27 July 2010 and SDLT paid to HMRC on or before this date then the SDLT is unlikely to be affected by the change in VAT notwithstanding the term of the lease spanning the date on which VAT increases.

If you believe that you may be affected by the change in the VAT rate please contact us on 0207 288 4700 or email us at info@boltburdon.co.uk. We can assess whether additional SDLT is due and, if required, deal with the submission of a revised SDLT return and settling the additional SDLT liability with HMRC.

25 October 2010 by

Thou Shalt Not……….. Restrictive Covenants and what they mean to you

Covenants are 'promises' or 'obligations' to either do or not do something, they are found in many legal documents and the vast majority of properties in England will be affected by them in some way. Even when land is bought and sold these covenants 'run with the land' and will affect all future owners.

28 October 2010 by Sonal Ghelani

I am monarch of all I survey; my right there is none to dispute….

You will be familiar with the expression ‘let the buyer beware’ or for the Latin minded, ‘caveat emptor’. In short, this means that it is for a purchaser to ensure that the property they are buying has no physical defects and is structurally sound.

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