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HMRC internal manual

VAT Construction

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

A ‘hospice’ provides care for the terminally ill. Hospices provide overnight accommodation for patients.  With changes in the hospice movement you may find a hospice also provides respite care, day care, clinics and care for people in their own homes.

A building will be a hospice for the purpose of Group 5 if it has a ‘residential purpose’.  In a hospice context this means that the building contains some overnight accommodation for the people it provides care to. A building used by an organisation to care for the terminally ill that does not provide overnight accommodation is not used for a ‘relevant residential purpose’ and won’t therefore be a hospice for the purpose of Group 5.

Please note however, use by a charity proving day care for the terminally ill may nevertheless be use for a ‘relevant charitable purpose’.

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 does not apply.

Note: Residential hospices may also qualify for relief because they are intended for use for a ‘relevant charitable purpose’ (VCONST16000).