Overview of VAT and property issues

Supplies of land

For VAT purposes, the term 'land' includes any of the following:

1. •

   buildings

2. •

   civil engineering works

3. •

   works

4. •

   walls

5. •

   trees and plants

6. •

   waterways, ways, watercourses and commons

7. •

   any other structure or natural object in, under or over 'land' that continues to remain attached to it (ie certain fixtures and fittings)

A business makes a supply of land if it grants one of the following:

1. •

   a grant of a freehold or leasehold interest in the land

2. •

   an assignment of a lease by an existing tenant to a new tenant

3. •

   a surrender of an interest in land to the person who granted the interest

   An interest in land includes a 'legal' or 'beneficial' interest in the land. A legal interest usually constitutes some formal ownership of an interest or right of land (ie a freehold or leasehold interest). A beneficial interest is the right to receive the benefit of any supplies made in the land in question; another party could own the legal interest in the land. The benefit could be the right to receive any rental income or sale proceeds.

Rights over land

Rights over land usually include the following:

1. •

   right of entry - this allows a party or person legal right to enter specific land

2. •

   easements - this is where the owner of neighbouring land is given a right which enables them to make their property better or more convenient (ie the creation of