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HMRC internal manual

VAT Land and Property

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HM Revenue & Customs
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Option to tax: scope of the option to tax: options exercised before 1 March 1995 in relation to agricultural land and parades, precincts and complexes

Before 1 March 1995, slightly different rules applied to determine the scope of an option to tax in respect of agricultural land and ‘parades, precincts and complexes’:

(i) it was not possible to opt to tax discrete areas of agricultural land (so, if you opted a piece of agricultural land, the option would generally affect any adjoining agricultural land), and

(j) any ‘parade’ ‘precinct’ or ‘complex’ was treated as a single building for the purpose of the option to tax (so if you opted an individual retail unit within a parade, precinct or complex, the option automatically applied to the whole of the parade, precinct or complex). This rule was in place of the current rule on fully enclosed complexes (742A, paragraph 2.2).

However, the rules on buildings ‘linked internally’ or linked by ‘covered walkway’ were the same then as they are now.

Any option to tax made prior to 1 March 1995 in relation to agricultural land or units within parades, precincts or complexes will be governed by the old rules. These are explained below.

Agricultural land

An option to tax exercised before 1 March 1995 in relation to agricultural land covered adjoining agricultural land unless it was:

  • separated by non agricultural land (but not merely by a road, railway, river or something similar), or
  • separated by agricultural land in separate ownership (ie neither the opter nor a ‘relevant associate’ had an interest in, right over or licence to occupy it).

Parades, precincts or complexes divided into separate units

Before 1 March 1995, a parade, precinct or complex consisting of separate units was treated as a single building. If, before 1 March 1995, a person opted to tax an individual unit or units within a parade, precinct or complex, the option applied to the whole of the parade, precinct or complex.