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HMRC internal manual

VAT Construction

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‘Relevant residential purpose’ - interpretation of terms: category (c) - hospices

A ‘hospice’ is traditionally an institution that provides care for the terminally ill. With changes in the hospice movement you may find a hospice also provides respite care and day care.

A hospice only falls within the meaning of ‘relevant residential purpose’ to the extent that it contains residential accommodation. Day hospices that don’t provide residential accommodation aren’t used for a ‘relevant residential purpose’.

Where a hospice is used for both purposes, apportionment will be necessary (VCONST17000). Please note however use as a day hospice may be use for a ‘relevant charitable purpose’ and apportionment may not be necessary.

Hospices are often located at hospitals and may even be administered by those hospitals. Although this wouldn’t in itself prevent relief applying, if it is formed by extending or enlarging a hospital building this would mean that the zero rate for ‘new’ buildings doesn’t apply.

Note: Residential hospices may also qualify for relief because they are intended for use for a ‘relevant charitable purpose’ (VCONST16000). If so, there is no need to distinguish between residential and non-residential use.