THERE are to be no financial implications to South Ayrshire Council following tax concerns from the disbandment of Ayr Renaissance.

After seeking advice from accounting experts Ernst and Young, Chief Executive Eileen Howat told councillors that no cost will be suffered from the council or the LLP when transfer of assets are made to the council. It was thought that amounts of Value Added Tax (VAT), Corporation Tax (CT), Capital Gains Tax (CGT) and Land and Buildings Transaction Tax (LBTT) would be due.

The concerns were raised as the aggregate value of the properties in the transfer was said to be almost £700,000. According to LBTT legislation, this would have meant an amount of £21,525 being chargeable. However, Ernst and Young have advised that group relief would be available and no LBTT would therefore be available.

The clarity on the tax matter now allows Ayr Renaissance to officially disband which will be done imminently. With regards to the VAT, Ernst and Young advised: “The input VAT incurred by the council should be recoverable, subject to its intended use for a taxable or statutory non-business purpose. Or where used for an exempt purpose, VAT recovery will be subject to its partial exemption calculation. To protect VAT recovery in the council it would be advisable for the Council to Opt to Tax (OTT) the property. In this scenario there would be no adverse VAT costs.”

Following advice, the transfer of assets will take place before the next tax year at the end of March 2019. The winding up will proceed once advised.