QUESTION 2 (14 marks)

a) Assume that it is now February 2023 and that Carnegie successfully acquired 12 Dolton Hill in 2021 as planned.

Carnegie has now completed its planned works to renovate 12 Dolton Hill and has decided to sell the freehold in order to raise capital for other projects. It has found a buyer, Primrose Insurance plc.

Carnegie's managing director, Adelle Green contacts Teresa and tells her that Primrose Insurance do not have a solicitor appointed. She asks whether Teresa can act for Primrose as well as Carnegie on this sale to speed things up.

Advise Carnegie if you can act for them as well as for Primrose

5 marks

b) Primrose decides to instruct their own solicitor. Carnegie wants to ensure that they recoup as much of the cost of the renovation works as possible, including any VAT paid. It is aware that this may have a knock on effect on the sale to Primrose Insurance plc.

Advise Carnegie as to the VAT status of 12 Dolton Hill, Carnegie's option in the light of the sale to Primrose Insurance and how the option affects Carnegie's ability to recover VAT on the renovation works and any potential repercussions for the sale transaction.

9 marks