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HMRC internal manual

VAT Input Tax

Specific issues: sale of domestic property

Where a sole proprietor, partner or company director:

  • sells a privately owned domestic property to generate funds; and
  • uses those funds to finance a business

the VAT incurred on the selling costs is not input tax. Such costs might include legal fees and estate agents fees.

In these cases the supplies of services are made to the individual owner of the property for the sale of private property. They are not incurred for the purpose of any business activities, even though the business may receive the benefit of the sale proceeds.