Finance Act 1995

26 Co-owners etc. of buildings and land

(1) After section 51 of the [1994 c. 23.] Value Added Tax Act 1994 there shall be inserted the following section—

“51A Co-owners etc. of buildings and land

(1) This section applies to a supply consisting in the grant, assignment or surrender of any interest in or right over land in a case where there is more than one person by whom the grant, assignment or surrender is made or treated as made; and for this purpose—

(a) a licence to occupy land, and

(b) in relation to land in Scotland, a personal right to call for or be granted any interest or right in or over land,

shall be taken to be a right over land.

(2) The persons who make or are treated as making a supply to which this section applies (“the grantors”) shall be treated, in relation to that supply and in relation to any other such supply with respect to which the grantors are the same, as a single person (“the property-owner”) who is distinct from each of the grantors individually.

(3) Registration under this Act of the property-owner shall be in the name of the grantors acting together as a property-owner.

(4) The grantors shall be jointly and severally liable in respect of the obligations falling by virtue of this section on the property-owner.

(5) Any notice, whether of assessment or otherwise, which is addressed to the property-owner by the name in which the property-owner is registered and is served on any of the grantors in accordance with this Act shall be treated for the purposes of this Act as served on the property-owner.

(6) Where there is any change in some, but not all, of the persons who are for the time being to be treated as the grantors in relation to any supply to which this section applies—

(a) that change shall be disregarded for the purposes of this section in relation to any prescribed accounting period beginning before the change is notified in the prescribed manner to the Commissioners; and

(b) any notice (whether of assessment or otherwise) which is served, at any time after such a notification, on the property-owner for the time being shall, so far as it relates to, or to any matter arising in, such a period, be treated for the purposes of this Act as served on whoever was the property-owner in that period.”

(2) Paragraph 8 of Schedule 10 to that Act (persons to whom the benefit of consideration for the grant of an interest accrues to be treated as person making the grant) shall become sub-paragraph (1) of that paragraph, and after that sub-paragraph there shall be inserted the following sub-paragraphs—

“(2) Where the consideration for the grant of an interest in, right over or licence to occupy land is such that its provision is enforceable primarily—

(a) by the person who, as owner of an interest or right in or over that land, actually made the grant, or

(b) by another person in his capacity as the owner for the time being of that interest or right or of any other interest or right in or over that land,

that person, and not any person (other than that person) to whom a benefit accrues by virtue of his being a beneficiary under a trust relating to the land, or the proceeds of sale of any land, shall be taken for the purposes of this paragraph to be the person to whom the benefit of the consideration accrues.

(3) Sub-paragraph (2) above shall not apply to the extent that the Commissioners, on an application made in the prescribed manner jointly by—

(a) the person who (apart from this sub-paragraph) would be taken under that sub-paragraph to be the person to whom the benefit of the consideration accrues, and

(b) all the persons for the time being in existence who, as beneficiaries under such a trust as is mentioned in that sub-paragraph, are persons who have or may become entitled to or to a share of the consideration, or for whose benefit any of it is to be or may be applied,

may direct that the benefit of the consideration is to be treated for the purposes of this paragraph as a benefit accruing to the persons falling within paragraph (b) above, and not (unless he also falls within paragraph (b) above) to the person falling within paragraph (a) above.”

(3) This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different purposes.