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HMRC internal manual

VAT Land and Property

HM Revenue & Customs
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Exemption: licences to occupy land: what is a licence to occupy?

See Notice 742 Land and property for examples of transactions that are and are not licences to occupy.

A licence to occupy is something that falls short of a formal interest in or right over land within UK land law but nevertheless falls within the European definition of a ‘leasing or letting of immovable property’.

For a transaction to be classified as a ‘licence to occupy’ for the purpose of Group 1, it must have all of the fundamental characteristics of a ‘leasing or letting of immovable property’ [see VATLP05700].