HM Revenue and Customs recently issued new rules relating to the option to tax to VAT commercial properties, the most important of which is that it is no longer possible to have separate VAT treatment for a building and the land on which it stands.
There are numerous other changes that apply – including one which makes the term ‘option to tax’ the official one to use: it has always been common usage, but the strictly correct term was the ‘election to waive exemption from tax’.
For more information on VAT and property, see notice VAT 742A (June 2008).
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