Historic houses - disposing of antiques and works of art

By Tolley

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

  • Historic houses - disposing of antiques and works of art
  • Registering for VAT
  • Business or private assets
  • Claiming input tax
  • Exemption for disposing of business assets

This guidance note provides an overview of the VAT treatment of the sale, gift or reallocation of assets from historic houses located in the UK.

Registering for VAT

The business will only be required to register for VAT once the total value of its taxable turnover exceeds the current VAT registration threshold. Please see the Overview - registering for VAT guidance note for more information. Businesses can voluntarily register for VAT if this is desirable. Businesses will not be required to register if they make occasional disposals of business assets that takes them temporarily over the VAT registration threshold. Also exempt supplies are not taken into consideration when determining if the VAT registration threshold has been exceeded.

Business or private assets

VATA 1994, Sch 9, Group 11; VAT Notice 701/12 ; VBNB42000

If a business charges an admission charge to enter the historic house then the house will be deemed to be used for business purposes. If the business is registered for VAT, HMRC will view any assets that are on public display, such as furniture, antiques, works of art, etc as business assets for VAT purposes. Therefore, the disposal of any business assets will be within the scope of VAT.

However, it is possible for a business to elect to treat the asset as a private asset when it is acquired or to reallocate a business asset to a private asset (see below).

If a person lends their private assets to another party who charges admission to enter their historic house, the person lending the assets is not using the asset for business purposes. Therefore any subsequent disposal of the asset will not be treated as a supply for VAT purposes.

The sale or disposal of assets from a private house that is used as a private residence will not be treated

More on Exempt supplies: