Corporation Tax

Overview of VAT and property issues

Produced by Tolley

Published 05 Apr 2022 08:43

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

Overview of VAT and property issues
What are land and property transactions?
Supplies of land
Rights over land
Right to occupy land
Exempt supplies of land
Supplies of land that are not exempt from VAT
Option to tax
What is covered
When is the option to tax invalid or disapplied?

More...

Notifying or applying for an option to tax
Revoking an option to tax

Overview of VAT and property issues

The VAT treatment of transactions relating to land and property is very complex and care needs to be taken when determining the correct VAT treatment of the transaction that will be undertaken. This guidance note is intended to provide you with a brief overview of the main points that need to be considered. This guidance note also contains links to other guidance notes that provide a more in-depth analysis of the points raised.

What are land and property transactions?

The following section provides a brief overview of the most common types of land and property transactions:

Supplies of land

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

•
buildings
•
civil engineering works
•
works
•
walls
•
trees and plants
•
waterways, ways, watercourses and commons
•
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:

•
a grant of a freehold or leasehold interest in the land
•
an assignment of a lease by an existing tenant to a new tenant
•
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

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Overview of VAT and property issues