Commentary

RCB/54/08 VAT—new zero-rated dwellings – whether arrangements are abusive

Part V16 Forms and other HMRC material

RCB/54/08 VAT—new zero-rated dwellings – whether arrangements are abusive

RCB/54/08 VAT—new zero-rated dwellings – whether arrangements are abusive

Revenue & Customs Brief, Issue 54. 28 October 2008

1. This brief is for house builders who have built or are building new dwellings with the intention, when they are completed, of selling either the freehold interest or a long lease of over 21 years (at least 20 years in Scotland) in each of the properties.

2. Several such house builders have sought guidance on whether HM Revenue & Customs (HMRC) considers certain transactions involving the supply of new dwellings to be abusive. This brief identifies those situations that HMRC considers not to be abusive.

Background

3. The first grant of a major interest (freehold sale or a long lease of over 21 years (at least 20 years in Scotland)) of a new dwelling is zero rated. This allows the house builder to recover all the input tax they have incurred in connection with the development (subject to the normal rules about blocked input

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