Value Added Tax

Sale or grant of a long lease ― major interests

Produced by Tolley
  • 22 Nov 2021 07:02

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

  • Sale or grant of a long lease ― major interests
  • What is the grant of a major interest?
  • Do break clauses in a lease stop it from being a major interest?
  • When is the grant the first grant of a major interest?
  • What happens if a major interest is granted within a VAT group?
  • What happens when an exempt supply is made before the first grant?
  • Practical point ― major interests

Sale or grant of a long lease ― major interests

This guidance note provides commentary on the meaning of a ‘major interest’. The first grant of a major interest in land and buildings can be zero-rated in a number of circumstances:

  1. when certain new buildings have been constructed, see the Sale or grant of a long lease ― zero-rating for newly constructed buildings guidance note

  2. when certain non-residential buildings have been converted for residential use, see the Sale or grant of a long lease ― zero-rating for newly converted buildings guidance note

  3. when certain protected buildings have been substantially reconstructed, see the Sale or grant of a long lease ― zero-rating for protected buildings guidance note

For an overview of the liability of supplies of land more broadly, see the Overview of VAT and property issues guidance note.

Detailed commentary on legislation and case law concerning ‘major interests’ is found in De Voil Indirect Tax Service V4.232G.

What is the grant of a major interest?

A major interest is granted when someone sells, assigns or surrenders one of the following:

  1. the freehold

  2. in relation to England, Wales and Northern Ireland, a lease for

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