Value Added Tax Act 1994

Real estate elections: elections to opt to tax land subsequently acquired U.K.

[F1 21. (1) A person (E) may make an election (a “real estate election”) for this paragraph to have effect in relation to—

(a) relevant interests in any building or land which E acquires after the election is made, and

(b) relevant interests in any building or land which a [F2 person] acquires after the election is made at a time when [F3 the person] is a relevant group member.

(2) If E makes a real estate election—

(a) E is treated for the purposes of this Part of this Schedule as if E had exercised an option to tax in relation to the building or land in which the relevant interest is acquired,

(b) that option is treated for those purposes as if it had been exercised on the day on which the acquisition was made and as if it had effect from the start of that day, and

(c) paragraph 20 does not apply in relation to that option,

but this sub-paragraph is subject to sub-paragraphs (3) to (5).

(3) A person (P) is not to be treated as a result of this paragraph as exercising an option to tax in relation to any building or land where at any time—

(a) P, or any [F4 person who] was a relevant group member at that time, exercises an option to tax in relation to the building (or part of the building) or land apart from this paragraph, and

(b) that option has effect from a time earlier than the time from which an option to tax exercised by P in relation to the building or land would otherwise have been treated as having effect as a result of this paragraph.

(4) A person (P) is not to be treated as a result of this paragraph as exercising an option to tax in relation to any building or land in which a relevant interest is acquired (“the later interest”) if—

(a) the person making the acquisition in question held another relevant interest in that building or land before P makes a real estate election, and

(b) the person making the acquisition in question continues to hold that other relevant interest at the time when the later interest is acquired.

(5) A person is not to be treated as a result of this paragraph as exercising an option to tax in relation to any building or land if—

(a) a relevant interest in the building or land is acquired as mentioned in sub-paragraph (1), and

(b) on the relevant assumptions the case would fall within paragraph 28 (pre-option exempt grants: requirement for prior permission before exercise of option to tax).

(6) The relevant assumptions are that—

(a) the effect of this paragraph is disregarded, and

(b) the day from which the person would want the option to tax to have effect for the purposes of paragraphs 28 or 29(3) is the day on which the relevant interest is acquired.

(7) A real estate election has effect only if—

(a) notification of the election is given to the Commissioners before the end of the period of 30 days beginning with the day on which it was made or such longer period as the Commissioners may in any particular case allow,

(b) the notification is made in a form specified in a public notice, and

(c) the notification contains information so specified.

(8) The Commissioners may at any time require a person who has made a real estate election to give to the Commissioners information specified in a public notice before the end of—

(a) the period of 30 days beginning with that time, or

(b) such longer period as the Commissioners may in any particular case allow.

(9) If a person (P) does not comply with that requirement—

(a) the Commissioners may revoke the election, and

(b) that revocation has effect in relation to relevant interests in any building or land acquired after the notified time by P or a [F5 person who] is a relevant group member at the time of acquisition.

• “The notified time” means the time specified in a notification given by the Commissioners to P (which may not be before the notification is given).

(10) A real estate election may not be revoked except in accordance with sub-paragraph (9).

(11) If a real estate election made by a person (P) is revoked in accordance with that sub-paragraph, another real estate election may be made at any subsequent time by—

(a) P, or

(b) any [F6 person who] is a relevant group member at that subsequent time,

but only with the prior permission of the Commissioners.

(12) In this paragraph—

• “relevant group member”, in relation to any person [F7 (“P”)] making a real estate election and any time, means a [F8 person who] is treated under sections 43A to 43D as a member of the same group as [F9 P] at that time, and

• “relevant interest”, in relation to any building or land, means any interest in, right over or licence to occupy the building or land (or any part of it).

[F10 (13) For the purposes of this paragraph, the time at which a relevant interest in any building or land is acquired is—

(a) the time at which a supply is treated as taking place for the purposes of the charge to VAT in respect of the acquisition, or

(b) if there is more than one such time, the earliest of them.

(14) For the purposes of sub-paragraph (13)(a), any order under section 5(3)(c) that would otherwise have the effect that the acquisition in question is to be treated as neither a supply of goods nor a supply of services is to be disregarded.]]

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)

F2 Word in Sch. 10 para. 21(1)(b) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(a)(i); S.I. 2019/1348, reg. 2

F3 Words in Sch. 10 para. 21(1)(b) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(a)(ii); S.I. 2019/1348, reg. 2

F4 Words in Sch. 10 para. 21(3)(a) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(b); S.I. 2019/1348, reg. 2

F5 Words in Sch. 10 para. 21(9)(b) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(c); S.I. 2019/1348, reg. 2

F6 Words in Sch. 10 para. 21(11)(b) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(d); S.I. 2019/1348, reg. 2

F7 Word in Sch. 10 para. 21(12) inserted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(e)(i); S.I. 2019/1348, reg. 2

F8 Words in Sch. 10 para. 21(12) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(e)(ii); S.I. 2019/1348, reg. 2

F9 Word in Sch. 10 para. 21(12) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 15(4)(e)(iii); S.I. 2019/1348, reg. 2

F10 Sch. 10 para. 21(13)(14) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2009 (S.I. 2009/1966), arts. 1(1), 4