The Value Added Tax (Amendment) (No. 4) Regulations 2010

Adjustments to the deduction of input tax on capital items

10.  In regulation 112 (interpretation of Part XV)—

(a) in paragraph (2), after “a person” insert “who has or acquires an interest in the item in question”;

(b) after paragraph (2) insert—

“(3) In this regulation and in regulation 114, an interest includes an interest which is treated as being supplied to a person under paragraph 37(3) of Schedule 10 to the Act provided that the numerator of the fraction in paragraph 37(5) of that Schedule is 3 or more.

(4) The reference to “owner” in paragraph (2) shall be taken to refer to—

(a) subject to sub-paragraph (b), the transferee where the whole or part of a capital item is transferred from one person to another and that transfer is not treated as a supply for the purposes of VAT; and

(b) the representative member of a group under section 43 of the Act if the capital item is owned by a member of the group.

(5) Where the owner is a transferee or representative member, that person shall be treated as having done everything that the transferor or group member (as may be the case) has done in respect of the capital item.”.