The Value Added Tax Regulations 1995

Supplies of land—special casesU.K.

84.  —

(1) Where by or under any enactment an interest in, or right over, land is compulsorily purchased and, at the time determined in accordance with section 6(2) or (3) of the Act, the person (the grantor) from whom it is purchased does not know the amount of payment that he is to receive in respect of the purchase then goods or, as the case may require, services shall be treated as supplied each time the grantor receives any payment for the purchase.

(2) [F1Subject to paragraphs (3) to (5)] where a person (the grantor) grants or assigns the fee simple in any land, and at the time of the grant or assignment, the total consideration for it is not determinable, then goods shall be treated as separately and successively supplied at the following times—

(a)the time determined in accordance with section 6(2), (4), (5), (6)F2... or (10) of the Act, as the case may require, and

(b)the earlier of the following times—

(i)each time that any part of the consideration which was not determinable at the time mentioned in sub-paragraph (a) above is received by the grantor, or

(ii)each time that the grantor issues a VAT invoice in respect of such a part.

[F3(3) Paragraph (2) above shall not apply in relation to a grant or assignment falling within item 1(a) of Group 1 of Schedule 9 to the Act where any of the persons specified in paragraph (4) below intend or expect to occupy the land on a date before a date ten years after completion of the building or civil engineering work on the land, without being in occupation of it wholly or mainly for eligible purposes.

(4) The persons referred to in paragraph (3) above are—

(a)the grantor;

(b)any person who, with the intention or in the expectation that occupation of the land on a date before a date ten years after completion of the building or civil engineering work would not be wholly or mainly for eligible purposes—

(i)provides finance for the grantor’s development of the land, or

(ii)has entered into any agreement arrangement or understanding (whether or not legally enforceable) to provide finance for the grantor’s development of the land;

(c)any person who is connected with any person of a description within sub-paragraph (a) or (b) above.

(5) For the purposes of this regulation—

(a)Note (2) to Group 1 of Schedule 9 to the Act shall apply in determining when a building or civil engineering work is completed;

(b)paragraph 3A(8) to (13) of Schedule 10 to the Act shall have effect for determining the meaning of “eligible purposes” and “occupation”;

(c)“the grantor’s development of the land” means any acquisition by the grantor of an interest in the land, building or civil engineering work and includes the construction of the building or civil engineering work;

(d)“providing finance” has the same meaning as in paragraph 3A(4) of Schedule 10 to the Act, subject to any appropriate modifications, but does not include paying the consideration for the grantor’s grant or assignment within paragraph (3) above;

(e)any question whether one person is connected with another shall be determined in accordance with section 839 [F4of the Taxes Act; but this is subject to sub-paragraph (f);]

[F5(f)a company is not connected with another company only because both are under the control of—

(i)the Crown,

(ii)a Minister of the Crown,

(iii)a government department, or

(iv)a Northern Ireland department;

(g)“company” and “control” have the same meaning as in section 839 of the Taxes Act.]]