My client is a developer and has recently sold 5 properties. The remaining property is proving difficult to sell and the client has offered to buy the existing house of customer who wanted to buy the final property in part-exchange, and the customer's house will be let pending eventual sale when the market improves. what are the VAT and SDLT implications of this transaction?
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Sell of the 6th property is first grant of major interest of a dwelling and hence zero rated.

Purchase of existing property, letting and its eventual sale are VAT exempt and the related VAT costs cannot be recovered unless its under deminus level.

FA 2003 Sch 6A, exempt SDLT on acquisition by property developer from individual acquisition new building if the conditions below are met:
- New building being sold to individual
- New building to be used as main residence
- Old building previously occupied as main residence at some time in the last 2 years
- Developer does not acquire area of land at old building beyond permitted area
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