Buildings and construction ― definition of relevant residential purpose (RRP)

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Buildings and construction ― definition of relevant residential purpose (RRP)
  • What is an RRP?
  • What is a home or institution?
  • What is residential accommodation?
  • What is a student?
  • What is a hospital?
  • Can a number of buildings be used together for an RRP?
  • Can a building be used for RRPs and be a dwelling?
  • Practical points around RRPs

This guidance note looks at the meaning of the term relevant residential purpose Detailed discussion of the legislation and case law on RRPs can be found in De Voil Indirect Tax Service V4 232BB What is an RRP An RRP means use as any of the following a home or institution providing residential accommodation for children a home or institution that provides residential accommodation with personal care for persons in need personal care includes assistance with washing eating etc this can include medical treatment that is required in order to contain a condition or assist with a person s rehabilitation such as old people disabled people people with drug or alcohol dependency past or present people suffering from a mental disorder a hospice residential accommodation for students or pupils residential accommodation provided to the armed forces a nunnery monastery or similar establishment accommodation that is used by at least 90 of the residents as the place of residence VATA 1994 Sch 7A Group 5 para 6 VATA 1994 Sch 8 Group 5 Note 4 The following are specifically excluded from the meaning of RRPs hospitals and similar institutions prisons and similar institutions hotels inns or similar establishments VATA 1994 Sch 7A Group 5 para 6 VATA 1994 Sch 8 Group 5 Note 4 A number of the uses above are explored further in this guidance note What is a home or institution Several of the possible uses for RRPs refer to homes and institutions VATA 1994 Sch 8 Group 5 Note 4 What is a home HMRC suggests in its VAT manuals that home in this context refers to a place wherea collection of people live together under rules set by a third party When looking at whether a building is a home it will be necessary to consider whether it is a separate and independent unit which is used as a home For example HMRC suggests that a bedroom block constructed in the

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