A small commercial law firm referred one of their clients for help in establishing the VAT liability of their product. E-Books produce ‘photobooks’ and became concerned when they discovered that one of their competitors had been assessed by HMRC on the basis that their product was subject to VAT at the standard rate.
A husband (H) and wife (W) were in partnership, through a limited liability partnership (LLP), with a company (Co) which H and W owned in equal shares. LLP was a property investment vehicle. The properties held by LLP were transferred into LLP after October 2003 and SDLT was paid.
Q: Is it preferable for SDLT purposes to have a 5 year lease with option to renew for further 5 years with first year of follow-on lease rent-free or a 10 year lease with a break clause at the end of year 5 which is exercised?