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HMRC internal manual

VAT Land and Property

From
HM Revenue & Customs
Updated
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Taxable person: land and buildings owned by more than one person: Background

In England, Wales and Northern Ireland, land that is owned concurrently by more than one person is held on trust for the benefit of the co-owners. The legal title to the land is owned by the trustees, and the right to derive income from the land (the beneficial ownership) remains with the co-owners. (“Land” includes the buildings on the land.)

The position is different in Scotland, where the land does not have to be held on trust for the benefit of the co-owners.

This is a difficult concept to grasp, and is perhaps best illustrated by a practical example: where A and B jointly purchase property which is conveyed into the name of A, A holds the property on trust for both A and B. The legal title to the land is owned by A, while A and B are co-owners of the beneficial interest. This is just one possible scenario - the identity of the trustees and beneficiaries in any co-ownership situation will depend upon how the land was acquired, and how it is to be held.