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HMRC internal manual

VAT Land and Property

HM Revenue & Customs
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Exemption: general

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:

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.