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HMRC internal manual

VAT Land and Property

Exemption: European concept of 'leasing or letting of immovable property': classifying transactions which comprise of a number of elements

In addition to considering the essential characteristics described above, you must look at a transaction as a whole and the circumstances under which it takes place to determine whether it fits the description of a ‘relatively passive activity, not generating any significant added value’ (see ECJ judgement in Temco, paragraph 20) or would be more accurately described as something else, such as the provision of a service or a transaction that is commercial or industrial by nature.

This is particularly relevant when leasing or letting is granted together with other goods or services as part of an overarching single supply. In such circumstances, you need to classify the overarching supply in order to determine its liability.

Please see VATLP06000 for full guidance on this topic.