Commentary

V4.116 Land subject to an option to tax—rules applicable prior to 1 June 2008

Part V4 Exemption, zero-rating and reduced rates

V4.116 Land subject to an option to tax—rules applicable prior to 1 June 2008

V4.116 Land subject to an option to tax—rules applicable prior to 1 June 2008

The grant of an interest in, right over, or licence to occupy land within VATA 1994, Sch 9, Group 1 (exemption; buildings and land) did not fall within that Group if, and to the extent that1:

  1.  

    •     the grant was made in relation to any building or land in respect of which an option to tax had been made

  2.  

    •     the grant was made at a time when the option had effect

  3.  

    •     the grant was made by the person who made the option or, if that person was a body corporate, by that person or a relevant associate (as defined below), and

  4.  

    •     the grant did not fall within the exceptions set out below (see 'Exceptions to the pre-1 June 2008 option to tax' below)

A body corporate (RA) was a relevant associate of another body corporate (BC) if BC made an option to tax and2:

  1.  

    (1)     both were members of the same VAT group3 at the time when the option first had effect, or

  2.  

    (2)     RA became a member of the same group as BC after BC made the option and while BC had an interest in, right over or licence to occupy all or part of the land or building concerned

A body corporate was also treated as a 'relevant associate' if it was treated as a member of the same VAT group as a body falling within 1 or 2 above at a time

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