Buildings and construction ― definition of relevant residential purpose (RRP)

By Tolley
Buildings and construction ― definition of relevant residential purpose (RRP)

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

  • Buildings and construction ― definition of relevant residential purpose (RRP)
  • What is an RRP?
  • What is a home or institution?
  • What is residential accommodation?
  • What is a student?
  • What is a hospital?
  • Can a number of buildings be used together for an RRP?
  • Can a building be used for RRPs and be a dwelling?
  • Practical points around RRPs

This guidance note looks at the meaning of the term ‘relevant residential purpose’.

Detailed discussion of the legislation and case law on RRPs can be found in De Voil Indirect Tax Service V4.232BB.

What is an RRP?

An RRP means use as any of the following:

  • a home or institution providing residential accommodation for children
  • a home or institution that provides residential accommodation with personal care for persons in need (personal care includes assistance with washing, eating, etc; this can include medical treatment that is required in order to contain a condition or assist with a person’s rehabilitation), such as:
    • old people
    • disabled people
    • people with drug or alcohol dependency (past or present)
    • people suffering from a mental disorder
  • a hospice
  • residential accommodation for students or pupils
  • residential accommodation provided to the armed forces
  • a nunnery, monastery or similar establishment
  • accommodation that is used by at least 90% of the residents as the place of residence

VATA 1994, Sch 7A, Group 5, para 6; VATA 1994, Sch 8, Group 5, Note 4

The following are specifically excluded from the meaning of RRPs:

  • hospitals and similar institutions
  • prisons and similar institutions
  • hotels, inns or similar establishments

VATA 1994, Sch 7A, Group 5, para 6; VATA 1994, Sch 8, Group 5, Note 4

A number of the ‘uses’ above are explored further in this guidance note.

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