Definition of dwelling, relevant residential and relevant charitable purpose

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

  • Definition of dwelling, relevant residential and relevant charitable purpose
  • Dwelling
  • Statutory planning consent
  • Relevant residential purpose
  • Relevant charitable purpose
  • Some relevant case law

This guidance note provides the definition of some common property terms used in land and property transactions.

Dwelling

A building is designed as a dwelling or a number of dwellings if it meets the following conditions:

  • it is a self-contained living accommodation (VCONST14120)
  • there is no direct internal access between dwellings or part of a dwelling (VCONST14130)
  • there are no covenants, statutory planning consent or similar provisions which prevent the separate use of a dwelling (VCONST14140)
  • there are no covenants, statutory planning consent or similar provisions which prevent the separate disposal of a dwelling (VCONST14180)
  • statutory planning consent has been granted in respect of the dwelling (where required) and the construction has been carried out in accordance with the consent received

VATA 1994, Sch 8, Group 5, Note 2; HMRC Notice 708 ; De Voil Indirect Tax Service V4.232B (subscription sensitive)

The imposition of restrictions on the types of individuals who can occupy the dwelling will not prevent the building being called a dwelling for VAT purposes. However, if the restriction prevents the building from being used, or from being sold (or otherwise disposed of), separately from another building, structure or even land then it will not be treated as a dwelling for VAT purposes.

Designed to remain or become a dwelling or number of dwellings

A building has been designed to become a dwelling or number of dwellings if the following conditions are satisfied:

  • it is a self-contained living accommodation
  • there is no direct internal access between dwellings or part of a dwelling
  • there are no covenants, statutory planning consent or similar

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