Commentary

V7.354 Partial exemption—house builders and rental income

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.354 Partial exemption—house builders and rental income

Part V7 Tax planning | Commentary

V7.354 Partial exemption—house builders and rental income

What happens if a house builder is unable to sell a dwelling he has built and decides to rent it out on a temporary basis ie creating exempt rental income rather than a zero-rated sale of a new home?

If a house builder rents out a property he has constructed for even a short period of time, the costs then relate to both taxable and exempt supplies – and an input tax adjustment could be needed.

HMRC took the opportunity to clarify its policy on the input tax challenges facing house builders in the above situation and full details are explained in Revenue &

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