Investing in commercial property can be a highly rewarding investment but the path to prosperity leads through a minefield of tax and VAT considerations, according to Howard Voisey, partner at accountants and business advisers PKF in Birmingham. Mr Voisey, who is head of PKFs property team in the West Midlands, said: It is important that those planning on investing in property in 2005 are aware of the many tax and VAT issues associated with the process. We have produced ten top tips which will help people negotiate a smooth transaction and avoid spending more than they need to on what is an expensive but hopefully rewarding investment. Be clear on what your intentions are for the property - is it for re-sale at a profit, an investment or an asset to be used in a trade? How are you going to hold the property? Consider structuring the purchase as a share acquisition to minimise stamp duty land tax. Ensure that you perform sufficient due diligence on the company to be purchased and obtain relevant warranties/indemnities. Where possible, structure the purchase as a transfer of a going concern for VAT purposes and thereby reduce stamp duty land tax. Maximise the position on capital goods scheme adjustments is fully understood in advance. Consider your capital allowance claims. It may be possible to claim accelerated tax relief for items that are scrapped. Establish whether you need to immediately opt to tax the building or obtain clearance from customs (a permission option) before refurbishment starts, to prevent the works falling within the capital goods scheme - which would result in spreading VAT recovery over a ten year period. Establish what your likely tax rate will be on the sale. If you are selling shares, will there be any de-grouping charges on the company you sell? On the sale, is it more advantageous to retain the capital allowances, or to sell them to the purchaser? Can you crystallise all the remaining allowances on the sale? If the sale proceeds include an overage, ensure that you understand the tax consequences. There may well be an expensive sting in the tale. Check that the VAT option to tax that has been made is for the building being sold and not just the land or a prior building on the site. | 
