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HMRC internal manual

VAT Construction

Zero-rating major interest grants in buildings: ‘person constructing a building’: 'person constructing' and VAT groups

If a company within a VAT group is a ‘person constructing’ a building, then zero-rating can only apply to the grant of a major interest in the building to a person outside the VAT group when that company makes the grant.

Note: If a major interest in a building is granted to another member of the VAT group, ‘person constructing’ status is not transferred. But more than one company in a VAT group may have ‘person constructing’ status, for example if one company is the developer of a project and another is the main contractor.

You can find further information on supplies by members of VAT groups in

  • VCONST03700 
  • Section 4.5.3 of Notice 708 Buildings and construction 
  • the V1-28: Registration guidance - Part 1 
  • the V1-28: Registration guidance - Part 2A 
  • the V1-28: Registration guidance - Part 2B.