A supplier must opt to tax to recover any input VAT on costs associated with an exempt land and property transaction. This document covers this in detail, together with the conditions; types of properties covered by this; notifying or applying; who needs to opt; what happens if changes are made to the opted property; excluding properties from an option to tax; who is bound; and drafting contracts.
Points discussed within this guidance note:
> What land and property is covered by the option to tax?
This guidance note provides an overview of the option to tax or election to waive exemption in relation to supply of certain land and property. It is vital that the business clearly defines the exact area that they intend to be covered by the option to tax and this section considers new buildings, old buildings and properties opted before 1 March 1985.
>> Land that is opted to tax
>> Buildings that are opted to tax
>> Properties opted before 1 March 1995
> Notifying or applying for an option to tax
HMRC should be notified in writing of the decision of the option to tax within 30 days of a decision being made. This note details the form to use, and what details are required, as well as covering belated notifications and on what grounds HMRC will accept such notification.
>> Belated notification of an option to tax
> Who needs to opt to tax?
>> Beneficial owners
>> Joint owners
>> Limited partnerships
>> Limited liability partnerships
> When is permission required to opt to tax?
> What happens if changes are made to opted land and property?
> Excluding properties from an option to tax
>> Notifying HMRC
> Who is bound by an option to tax?
> Examples of the implications of opting to tax
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