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HMRC internal manual

VAT Construction

HM Revenue & Customs
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Zero-rating major interest grants in buildings: about this section

This section provides guidance on when a person constructing a building can make a zero-rated major interest grant in it. VCONST10000 provides guidance on major interest grants in substantially reconstructed ‘protected buildings’.

The zero rate applies to major interest grants in buildings that are:

  • ‘designed as a dwelling or number of dwellings’ (VCONST14100)
  • intended for use solely for a ‘relevant residential purpose’ (VCONST15000)
  • intended for use solely for a ‘relevant charitable purpose’ (VCONST16000).

There are occasions when the grant will need to be apportioned (VCONST03800).