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HMRC internal manual

VAT Construction

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HM Revenue & Customs
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Zero-rating major interest grants in substantially reconstructed ‘protected buildings’: basic conditions for zero-rating major interest grants in substantially reconstructed protected buildings

The basic conditions for zero-rating the sale or long lease of substantially reconstructed protected buildings 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 6 unless otherwise stated) | Guidance | || | 1 - Work is carried out to a ‘protected building’ | Item 1.
Note 1.
  | VCONST08200 | | 2 - The protected building is ‘substantially reconstructed’ | Item 1.
Note 4.
  | VCONST10300 | | 3 - A grant of a major interest in the building is made | Item 1.
VATA 1994, Section 96
  | VCONST03200 | | 4 - For tenancies, the payment is a premium or first payment of rent | Note 3.
VATA 1994, Schedule 8, Group 5, Note 14.
  | VCONST10200

VCONST10400 | | 5 - The building is not a holiday home | Note 3.
VATA 1994, Schedule 8, Group 5, Note 13.
  | VCONST10500 | | 6 - The grantor has ‘person substantially reconstructing’ status | Item 1.

  VCONST10600  
  7 - The grant is the first major interest in the building Item 1.
  VCONST10700  
  8 - Where necessary, a valid certificate is held Note 3.
VATA 1994, Schedule 8, Group 5, Note 12. VCONST18000