SolvedVCONST03100 | Zero-rating major interest grants in buildings: the basic conditions for zero-rating major interest grants in buildings
From HM Revenue & Customs · VAT Construction
The basic conditions for zero-rating the major interest grant in a building are set out in Notice 708 Buildings and construction. The legal basis for those conditions and where further guidance on their interpretation can be found is as follows:
| Condition | Relevant law (all references are to VATA 1994, Schedule 8, Group 5 unless otherwise stated) | Guidance |
|---|---|---|
| 1 - A grant of a major interest in the building is made | Item 1(a). VATA 1994, Section 96 (definition of ‘major interest’) and Note 1 to Group 5. | VCONST03200 |
| 2 - For tenancies, the payment is a premium or first payment of rent | Note 14. | VCONST03300 |
| 3 - A building is being constructed | Item 1(a), Notes 3, 5 and 16 to 18. | VCONST02200 |
| 4 - The building is not a holiday home | Note 13. | VCONST03400 |
| 5 - The grantor has ‘person constructing’ status | Item 1(a). | VCONST03500 |
| 6 - The grant is the first major interest grant in the building | Item 1(a). | VCONST03200 and VCONST03700 |
| 7 - Where necessary, a valid certificate is held | Note 12. | VCONST18000 |