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HMRC internal manual

VAT Construction

‘Relevant residential purpose’ - interpretation of terms: category (g) - an institution which is the sole or main residence of at least 90 per cent of its residents

This category is intended to capture buildings that fall outside the other categories of relevant residential purpose - although it is possible for the building to fit within more than one category. For example, the assisted living units mentioned at VCONST15250 could fall into this category.

Whether it is a person’s sole residence will be evident from the facts. Extending it to embrace main residence is to capture situations where a person has a home elsewhere but the institution is his or her main residence. Such an example is a refuge for the victims of domestic violence.

The meaning of ‘institution’ is covered in VCONST15140 and includes buildings such as a nurses’ home, a police section house, almshouses, ex-offenders’ hostels. It doesn’t include establishments built for use as temporary accommodation such as overnight hostels for the homeless.

In Derby YMCA (VTD 16914) (VCONST15140), although it found that the accommodation in question wasn’t an institution in itself and thus didn’t meet Note 4(g), the Tribunal did comment on the use of the accommodation:

I am satisfied that the 10 new self-catering flatlets are the sole or main residence of at least 90 per cent of their residents…

It is implicit that had the whole of the YMCA complex been constructed rather than a part, Note 4(g) would have been met.

Note: Institutions in this category may be used ‘as a hotel…or similar establishment’ (VCONST15630).