Zero-rating major interest grants in buildings: apportionment
Apportionment for qualifying parts of buildings
VCONST17000 provides guidance on apportioning major interest grants in qualifying parts of buildings.
Grants in mixed developments
A single grant may include a number of separate, identifiable, sites, such as the transfer of a whole housing estate.
In such cases it is important to separately define each site and establish its liability. VCONST03700 explains what is meant by ‘site’.
That part of the grant that is in respect of sites of buildings designed as dwellings or as numbers of dwellings or intended to be used solely for a relevant residential or relevant charitable purpose is eligible for the zero rate.
That part of the grant that is in respect of sites of other buildings will be standard-rated or exempt. For more information on this, check the VATLP Land and Property guidance.
That part of the grant that is respect of land that is not the sites of buildings, including paths, roads and civil engineering structures will be standard-rated or exempt. For more information on this, check the VATLP Land and Property guidance.
In addition if the grant of the estate is part of the transfer of a going concern, the whole grant may be outside the scope of VAT. For more information on this, check Notice 700/9 Transfer of a business as a going concern.