This Q&A assumes that the option to tax is capable of operating in relation to the land and is not disapplied. There is considerable uncertainty about the value added tax (VAT) treatment of the grant of easements over land and in particular whether the exemption for supplies of interests in land should apply. However, in practice, this uncertainty is generally removed in a situation where the landowner granting the easement has opted to tax, as if the option applies, the supply will always be treated as taxable, even if exemption would otherwise apply. Potential for exemption Subject to certain exceptions, including the valid exercise of an option to tax, the UK VAT legislation (Item 1 of Group 1 in Part I of Schedule 9 to the Value Added Tax Act 1994) exempts: ‘The grant of any interest in or right over land or of any licence to occupy land, or, in relation to land in