Property types and scenarios

Buying From a Receiver or Administrator

PropertyVAT Team · Updated 21 October 2026 · 3 min read

Distressed sales are attractive precisely because they are quick and priced to move. The same features make the VAT position harder to pin down than on any other kind of transaction.

Who is actually selling

The distinction matters for VAT.

An LPA receiver is typically appointed by a lender and acts as agent of the borrower. The sale is made in the borrower's name, so the borrower's VAT position — including any option to tax — generally governs.

An administrator acts for the company and sells as its agent or officer, so again the company's VAT position is the relevant one.

In both cases, the person you are dealing with is not the person whose VAT history determines whether 20% is payable. That is the root of the difficulty.

Why the information is thin

Receivers and administrators sell on restricted terms:

• Limited or no replies to enquiries
• No warranties as to title, condition or tax status
• Short timetables, sometimes with fixed completion dates
• Contracts drafted heavily in the seller's favour

They often have no access to the borrower's historic VAT records. An option to tax made twelve years ago by a company now in difficulty may be documented nowhere the receiver can reach.

So the answer to "has the property been opted to tax?" is frequently a candid "we do not know, and we are not warranting it."

How to handle an unknown VAT position

You cannot resolve what nobody can evidence. You can price and fund for it.

1. Ask anyway, in writing. Sometimes the records exist. A receiver who can confirm the position will.
2. Check the title and any available documents for signs of an option — VAT clauses in historic leases are a useful indicator.
3. Ask whether VAT is being charged on this sale. The contract will usually say, even where the underlying history is unexplained.
4. Read the special conditions carefully. They will allocate the VAT risk, usually to you.
5. Budget on the basis that VAT may apply. Price plus 20% plus SDLT on the VAT-inclusive figure.
6. Have funding in place before you commit.

That last point is the practical one. Distressed sales move fast, and a buyer who discovers an unexpected 20% with a fixed completion date and no facility has very few options.

Register for VAT early, regardless

This matters more on distressed purchases than anywhere else.

The timetable is short, the VAT position may be unclear until late, and recovery depends on the buying entity being registered at the time of the purchase.

A buyer who waits for certainty on the VAT position before starting registration may end up with VAT charged and no ability to recover it. Register when you start the deal, not when the position is confirmed.

TOGC on a distressed sale

Possible, but harder.

Where a let property transfers with a continuing letting business, TOGC treatment can apply in principle. The practical difficulties are evidential: incomplete tenancy records, uncertainty about whether the borrower opted, and a seller unwilling to warrant anything.

You will also need to opt to tax and notify HMRC yourself by the relevant date, in a transaction where the completion date may be sooner than you expect.

Take advice early if a TOGC is in contemplation, and have a funding plan if it does not hold.

What to expect in the contract

Distressed sale contracts commonly include:

• VAT to be paid in addition to the price, if chargeable
• No warranty as to whether an option exists
• Risk of VAT allocated to the buyer
• A short, fixed completion period
• Limited or no right to delay

Read these as a description of your exposure, not as boilerplate. On this kind of purchase, the contract is doing most of the work that due diligence would normally do.

This guide is general information, not legal or tax advice. Distressed sales carry specific risks — take advice on the contract and the VAT position before committing.