V7.375 Exempt, standard rated and zero-rated supplies—grant of an interest in or right over land
What constitutes the grant of an interest in or right over land?
As explained earlier, the grant of any interest in or right over land is, subject to certain exceptions, an exempt supply. The grant of an interest in, or right over, land is different to a licence to occupy land. See Example 2.
Bill owns the freehold of a four-story office block – he agrees to allow Ben to use the third floor on an occasional basis and to sell Ben the second floor on a 25-year lease.
Solution – in the first situation, Ben has a licence to occupy the third floor. In the second situation, he has been granted an interest in the land on the second floor.
For advisors, it is imperative to have a good understanding of UK land law. This is beyond the scope of this division but it is highly recommended that advisors understand the distinctions between different legal and other interests in relation to the transfer of interests in land.
Situations when the grant of an interest in, or right over, land is standard rated
The supply of an interest in, or right over, land is exempt from VAT in most cases – but standard rated in the following main situations.
• New and uncompleted non-qualifying buildings and civil engineering works – if a new or uncompleted building does not qualify as a 'dwelling' or number of dwellings and is not
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial