VCONST03100 - Zero-rating major interest grants in buildings: the basic conditions for zero-rating major interest grants in buildings

The basic conditions for zero-rating the major interest grant in a building are set out in Notice 708 Buildings and construction. The legal basis for those conditions and where further guidance on their interpretation can be found is as follows:

Condition	Relevant law (all references are to VATA 1994, Schedule 8, Group 5 unless otherwise stated)	Guidance
1 - A grant of a major interest in the building is made	Item 1(a). VATA 1994, Section 96 (definition of ‘major interest’) and Note 1 to Group 5.	VCONST03200
2 - For tenancies, the payment is a premium or first payment of rent	Note 14.	VCONST03300
3 - A building is being constructed	Item 1(a), Notes 3, 5 and 16 to 18.	VCONST02200
4 - The building is not a holiday home	Note 13.	VCONST03400
5 - The grantor has ‘person constructing’ status	Item 1(a).	VCONST03500
6 - The grant is the first major interest grant in the building	Item 1(a).	VCONST03200 and VCONST03700
7 - Where necessary, a valid certificate is held	Note 12.	VCONST18000