Exemption from VAT for land and buildings
Produced in partnership with Martin Scammell

The following Tax practice note produced in partnership with Martin Scammell provides comprehensive and up to date legal information covering:

  • Exemption from VAT for land and buildings
  • Why does exemption matter?
  • Basis in legislation
  • Sales and leases
  • Exceptions
  • Other interests in land
  • Rights over land
  • Licences to occupy land and the leasing or letting of immovable property
  • What is land?
  • Leasing or letting
  • More...

Exemption from VAT for land and buildings

FORTHCOMING CHANGE: HMRC published a call for evidence, ‘Simplifying the VAT Land Exemption’, in May 2021, inviting comments on some radical suggestions for the future scope of the exemption. These included making all ‘short-term or minor’ interests in land subject to VAT, or removing the current ‘option to tax’ rules and instead making all land transactions VATable, subject to specific exemptions such as for property with a residential or charitable purpose. These proposals were not generally well-received, but the move might herald some more specific, and perhaps appropriate, changes. Any such process is likely to take several years. The call for evidence ran from 12 May 2021 to 3 August 2021, and HMRC intends to hold further discussions with businesses in 2022. For more information, see News Analysis: Views on HMRC’s proposals to simplify VAT land exemption rules.

This Practice Note is about the scope of the VAT exemption for property transactions. In many cases the exemption is overridden by other provisions, and these are noted where relevant.

This Practice Note contains references to EU legislation and case law. For information on the ongoing significance of EU law in the UK following the end of the Brexit implementation period on 31 December 2020, see Practice Note: Brexit and tax—the continued application of EU law. Unless otherwise stated, all judgments of

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