Value Added Tax Act 1994 (c. 23)

SCHEDULES

[F1 SCHEDULE 10 U.K. BUILDINGS AND LAND

Textual Amendments

F1 Sch. 10 substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2008 (S.I. 2008/1146), arts. 1(1), 2 (with Sch. 2)

PART 2 U.K. RESIDENTIAL AND CHARITABLE BUILDINGS: CHANGE OF USE ETC

Meaning of “relevant zero-rated supply” U.K.

35. For the purposes of this Part of this Schedule a “relevant zero-rated supply” means a grant or other supply which—

(a) relates to a building (or part of a building) intended for use solely for a relevant residential purpose, or

(b) relates to a building (or part of a building) intended for use solely for a relevant charitable purpose,

and which, as a result of Group 5 of Schedule 8, is zero-rated (in whole or in part).

Person to whom supply made grants interest etc in building and building not intended solely for relevant residential or charitable purpose U.K.

36. (1) This paragraph applies if—

(a) one or more relevant zero-rated supplies relating to a building (or part of a building) have been made to a person, and

(b) conditions A and B are met.

(2) Condition A is that, within the period of 10 years beginning with the day on which the building is completed, the person grants an interest in, right over or licence to occupy—

(a) the building or any part of it, or

(b) the building or any part of it including, consisting of or forming part of the part to which the relevant zero-rated supply or supplies related.

(3) Condition B is that after the grant—

(a) the whole or any part of the building or of the part to which the grant relates, or

(b) the whole of the building or of the part to which the grant relates, or any part of it including, consisting of or forming part of the part to which the relevant zero-rated supply or supplies related,

is not intended for use solely for a relevant residential purpose or a relevant charitable purpose.

(4) So far as the grant relates to so much of the building as—

(a) by reason of its intended use gave rise to the relevant zero-rated supply or supplies, and

(b) is not intended for use solely for a relevant residential purpose or a relevant charitable purpose after the grant,

it is taken to be a taxable supply in the course or furtherance of a business which is not zero-rated as a result of Group 5 of Schedule 8.

Person to whom supply made uses building otherwise than for relevant residential or charitable purpose U.K.

37. (1) This paragraph applies if one or more relevant zero-rated supplies relating to a building (or part of a building) have been made to a person and, within the period of 10 years beginning with the day on which the building is completed, the person uses—

(a) the building or any part of it, or

(b) the building or any part of it including, consisting of or forming part of the part to which the relevant zero-rated supply or supplies related,

for a purpose which is neither a relevant residential purpose nor a relevant charitable purpose.

(2) The person’s interest in, right over or licence to occupy so much of the building as—

(a) by reason of its intended use gave rise to the relevant zero-rated supply or supplies, and

(b) is used otherwise than for a relevant residential purpose or a relevant charitable purpose,

is treated as follows.

(3) The interest, right or licence is treated for the purposes of this Act as—

(a) supplied to the person for the purposes of a business which the person carries on, and

(b) supplied by the person in the course or furtherance of the business when the person first uses it for a purpose which is neither a relevant residential purpose nor a relevant charitable purpose.

(4) The supply is taken to be a taxable supply which is not zero-rated as a result of Group 5 of Schedule 8.

(5) The value of the supply is taken to be the amount obtained by the formula—

(6) For the purposes of the formula, A is the amount that yields an amount of VAT chargeable on it equal to—

(a) the VAT which would have been chargeable on the relevant zero-rated supply, or

(b) if there was more than one supply, the aggregate amount of the VAT which would have been chargeable on the supplies,

had so much of the building not been intended for use solely for a relevant residential purpose or a relevant charitable purpose.

(7) For the purposes of the formula, B is the number of whole years since the day the building was completed for which the building or part concerned has been used for—

(a) a relevant residential purpose, or

(b) a relevant charitable purpose.

Supplies in relation to a building where part designed for residential or charitable use and part designed for other uses U.K.

38. Note (10) of Group 5 of Schedule 8 applies for the purposes of this Part of this Schedule.

Definitions U.K.

39. In this Part of this Schedule, references to the expressions listed in the first column are to be read in accordance with the provisions listed in the second column—

Expression	Provision
completion of a building	Note (2) to Group 1 of Schedule 9
grant	Note (1) to Group 5 of Schedule 8/ Notes (1) and (1A) to Group 1 of Schedule 9
use for a relevant charitable purpose	Notes (6) and (12) to Group 5 of Schedule 8
use for a relevant residential purpose	Notes (4), (5) and (12) to Group 5 of Schedule 8]