A: You are correct that the seller’s OTT does not carry over to the client; each business has to make its own OTT if it wishes to. However, as the client intends to wholly occupy the factory and use it solely to make taxable supplies, it will be able to recover the VAT on the purchase of the building without making an OTT.
An OTT would only normally be worth considering if a business plans to make supplies of the property e.g. sell or rent out all or part of the building. This is generally exempt income, which creates input tax recovery issues, but an OTT makes it standard-rated (unless disapplied for anti-avoidance, charitable or residential use reasons), thereby allowing input tax recovery.
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