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Sale of land for new build residential

VAT position

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Hi all,

A piece of land is being sold with planning permission for new build residential houses - how does the seller determine the VAT status of the sale - is it zero rated on the basis that it is a plot of land sold for housing OR does the seller need some form of assurance from the buyer that they will build residential housing, for example what if the buyer changes development plans and decides to build commercial property? Am I overthinking this, or is it just a straight forward sale of land for residential purposes and is therefore zero rated, thanks, JMB

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RLI
By lionofludesch
16th Jul 2019 08:21

It's not zero rated.

It's exempt - barring the highly unlikely scenario of an option to tax.

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chips_at_mattersey
By Les Howard
16th Jul 2019 08:48

If the land is sold with clear residential planning permission, any subsequent change cannot affect the vendor's position.
And, of course, either way the sale will be exempt unless the vendor had opted.

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By Tax Dragon
16th Jul 2019 08:53

The above comments apply equally to any overage. That fact that such may be chargeable to income tax doesn't change the VAT position.

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By Vile Nortin Naipaan
16th Jul 2019 11:14

No. You will have to charge VAT, irrespective of what is going to happen to it after you've sold it.

There. Now you've got conflicting information - a given when you just ask random folk off the internet - why not get some paid for advice and make sure you get it right, Mr/Mrs Anonymous, as is your legal obligation.

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Replying to Vile Nortin Naipaan:
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By Tax Dragon
16th Jul 2019 11:27

AWeb. The home of Random Folk.

None so random as me.

Except perhaps thee.

(PS - your answer in not 100% conflicting with the previous ones. Unless I misread - or misunderstood - something... another risk of using a forum such as this for answering questions such as that.)

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Replying to Tax Dragon:
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By spidersong
16th Jul 2019 11:58

But conflicting with its confliction doesn't make it unconflicted.

(And I bet that sentence is ridiculously complex to put into Latin with the correct tenses and conjugations in agreement. But at least I'm unconflicted enough about English grammar to start sentences with a conjunction)

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Replying to Vile Nortin Naipaan:
RLI
By lionofludesch
16th Jul 2019 17:06

Quote:

No. You will have to charge VAT, irrespective of what is going to happen to it after you've sold it.

Even if the vendor isn't registered ?

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