a

the value of grants relating to the land on which the building or work is constructed, made or to be made to the developer, but excluding, in a case where construction of the building or work in question commenced before 1st January 1992, the value of any grants to be made for consideration in the form of rent the amount of which cannot be ascertained by the developer when the supply is treated as made, and in any other case excluding the value of any—

i

grants made before the relevant day to the extent that consideration for such grants was in the form of rent, and to the extent that such rent was properly attributable to a building which has been demolished,

ii

grants made before the relevant day in respect of a building which has been reconstructed, enlarged or extended so that the reconstruction, enlargement or extension falls within paragraph 5(8)(a)(ii) above, and does not fall also within paragraph 5(8)(b) above, to the extent that consideration for such grants was in the form of rent, and to the extent that such rent was properly attributable to the building as it existed before the commencement of the reconstruction, enlargement or extension,

iii

grants made before the relevant day in respect of a building which has been so reconstructed that the reconstruction falls within paragraph 5(8)(b) above, to the extent that consideration for such grants was in the form of rent, and to the extent that such rent was properly attributable to the building before the reconstruction commenced,

iv

grants falling within paragraph (aa) of item 1 of Group 1 of Schedule 6 to this Act; and

2A

Where the rate of tax (the lower rate) chargeable on a supply (the construction supply) falling within sub-paragraph (2)(b) above, the value of which is included in the value of a supply (the self-supply) treated as made by sub-paragraph (1) above, is lower than the rate of tax (the current rate) chargeable on that self-supply, then tax on the self-supply shall be charged—

a

on so much of its value as is comprised of the relevant part of the value of the construction supply, at the lower rate; and

b

on the remainder of its value at the current rate.

2B

For the purposes of sub-paragraph (2A)(a) above, the relevant part of the value of the construction supply means—

a

where the construction supply is a supply of goods, the value of such of those goods as have actually been delivered by the supplier;

b

where the construction supply is a supply of services, the value of such of those services as have actually been performed by the supplier,

4

For the purposes of sub-paragraph (2)(a)(i) above, the relevant day is the day on which the demolition of the building in question commenced and, for the purposes of sub-paragraph (2)(a)(ii) and (iii) above, the relevant day is the day on which the reconstruction, enlargement or extension in question commenced.

5

In the application of sub-paragraphs (1) to (4) above to a reconstruction, enlargement or extension to which sub-paragraphs (1) and (2) and sub-paragraphs (4) to (7) of paragraph 5 above apply by virtue of paragraph 5(8) above—

a

references to the building or work shall be construed as references to the reconstructed, enlarged or extended building or work, and references to construction shall be construed as references to reconstruction, enlargement or extension;

b

the reference in paragraph (a) of sub-paragraph (2) to the value of grants relating to the land on which the building or work is constructed shall be construed as a reference—

i

in relation to a reconstruction, enlargement or extension of an existing building to the extent that it falls within paragraph 5(8)(a)(i) above and does not fall also within paragraph 5(8)(b) above, to the value of grants relating to the new building land;

ii

in relation to a reconstruction, enlargement or extension of an existing building, to the extent that it falls within paragraph 5(8)(a)(ii) above and does not fall also within paragraph 5(8)(b) above, to the value of grants relating to the land on which the existing building stands multiplied by the appropriate fraction;

iii

in relation to a reconstruction, enlargement or extension to a work falling within paragraph 5(8)(c) above, to the value of grants relating to the new land.

6

For the purposes of sub-paragraph (5)(b)(ii) above the appropriate fraction shall be calculated by dividing the additional gross external floor area resulting from the reconstruction, enlargement or extension (excluding any floor area on new building land) by the gross external floor area of the reconstructed, enlarged or extended building (excluding any floor area on new building land).