UK exemption for supplies of land
Under the VAT Act 1994, Schedule 9, Group 1, the grant, assignment or surrender of an interest in, right over or licence to occupy land is exempt (subject to specific exclusions and the option to tax). You will find definitions of these terms in Notice 742 Land and property. For the purpose of this guidance, we refer to them collectively as ‘supplies of land’.
Exceptions to the exemption
Not all supplies of land are exempt. The Group 1 exemption does not apply where:
- the supply is specifically excluded from exemption (see VATLP07000)
- the supply is affected by an option to tax (see VATLP22000),
- the supply is zero rated rather than exempt, because it falls within Schedule 8, Group 5 or 6 (first sale or long lease of buildings designed as dwellings etc - see Notice 708 Buildings and construction), or
- the transfer of property is subject to the TOGC provisions (see Notice 700/9 Transfer of business as a going concern).
If a supply is specifically excluded from the exemption or affected by an option to tax, it will normally be taxable at the standard rate of VAT. The exception is for supplies that are eligible for relief under another group within Schedule 9 or elsewhere within the VAT Act.