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HMRC internal manual

VAT Deregistration

Stocks and assets on hand: land and property

By virtue of the VAT Act 1994 Schedule 4, paragraph 9, land and property are treated as goods. Consequently tax is payable on such assets which remain on hand at the time of deregistration, unless the trader is able to take advantage of any of the reliefs available.

The majority of queries tend to arise where a trader has purchased land and the supply to him was exempt but he subsequently elected to waive exemption. As no input tax was claimed there would not be a deemed supply on deregistration and output tax will not be due. You can find more information relating to this in VATSC - VAT Supply and Consideration.

It may be that the person will have to re-register and account for VAT on the eventual sale of the land or property, subject to the normal registration rules.