Office purchase / opt to tax / resi conversion - help!

[9005rpm]

Hi all,

I've been trying to buy an office to run my business from for ages, without luck. I've now found an opportunity for a listed building, over three floors currently an office on all floors. There is lapsed planning to convert the first and second floors to resi, and there is a separate access for these two floors. My aim is to buy the building, convert the first and second floor to resi, sell them on a long lease and then use the ground floor as my office.

Floor area is c. 450 sq ft per floor. Apartments around here are around £550k for about 900sq ft. I think I can buy the building for £600k + VAT. So, factor in the build cost and I may be able to sell on the resi and in net terms pick up a cheap office.

The building has opted to tax, which I think means it is subject to VAT. I also think I can recover the VAT after I have bought it, so a cash flow issue at this stage.

I'm going to speak to my accountant, but wanted to see if I could get a steer on here first. Anyone have experience of the VAT position? I think the resi, once converted would be subject to VAT?

Any suggestions on how best to manage this? How are these opportunities best tackled?

I have a SIPP but it would not be suitable for this prospect.

Any help you can offer would be really helpful.

Thanks!