Problem: Tony purchased an empty office building in London from Margot, an unconnected third party, on 1 September 2024. Tony paid £996,000 for the office building. No VAT was charged on the supply. Margot had purchased the office building on 1 July 2013 and had exercised the option to tax the building on that date. Tony plans to let the office building to an unconnected company, Black Ltd (which makes wholly exempt supplies), at an annual rental of £50,000. This amount is stated exclusive of VAT. Requirement Explain, with supporting calculations:
(a) the possible VAT consequences of both the purchase of the building by Tony and its subsequent rental; and
(b) the stamp duty land tax consequences of the purchase of the building by Tony.