SolvedVCONST04100 | Zero-rating major interest grants after a non-residential conversion: basic conditions for zero-rating major interest grants after a non-residential conversion
From HM Revenue & Customs · VAT Construction
The basic conditions for zero-rating the sale or long lease of a building after it has been subject to a non-residential conversion are set out in Notice 708 Buildings and construction. The legal basis for the 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(b). VATA 1994, Section 96 (definition of ‘major interest’). | VCONST04200 |
| 2 - For tenancies, the payment is a premium or first payment of rent | Note 14. | VCONST04300 |
| 3 - The building is the subject of a ‘non-residential conversion’ | Notes 7 to 9. | VCONST04400 |
| 4 - The building is not a holiday home | Note 13. | VCONST04600 |
| 5 - The grantor has ‘person converting status’ | Item 1(b). | VCONST04700 |
| 6 - The grant is the first major interest grant in the building | Item 1(b) | VCONST04800 |
| 7 - Where necessary, a valid certificate is held | Note 12. | VCONST18000 |