Supply of Immovable Property A building (whether new, second hand or old building) refers to a fixed structure in the ground in the sense of the common law fixture to the land. However at EU level, buildings which can be disassembled and reassembled have been categorised as buildings, notwithstanding that they have been severed. A supply of immovable property is a transfer in substance of […]
Capital Goods Scheme The rules on VAT and property were fundamentally altered in 2008, by the introduction of a Capital Goods Scheme. The purpose is to ensure that VAT recovered on the acquisition or development of property, is referable to specific lifetime of use for a purpose which is subject VAT. The scheme seeks to allow the VAT recovery during the “life” of the property. […]
2008 & Transitional Sale The pre-July 2008 rules on VAT, insofar as they applied to leases was radically to those which have applied since that date. Special transitional rules apply to leases, where the relevant interest was acquired before 1 July 2008. Because the post July 2008 rules “look back” up to 20 years, there are many situations in which the transitional rules will continue […]
Overview The special VAT provisions on leases and lettings do not apply to long leases at nominal rents, which are largely equivalent to freeholds. Their grant is treated as being in the nature of a sale, as is appropriate to their economic substance. Other leases and lettings are subject to the Capital Goods Scheme. Leases and letting are interchangeable terms and there is no distinction […]
No Thresholds The general thresholds for registration do not apply to VAT on the sale of immovable goods (real property land / buildings) and the leasing of freehold equivalents. Therefore, registration is required irrespective of thresholds. In the case of other leases, the landlord may elect to tax. If the turnover from leases is less than €37,500 per annum he may register but need not […]
Going Concern The general exemption for the transfer of a business as a growing concern applies to transfers of freehold property. This includes the grant of long leaseholds which are equivalent to freehold transfers. Under the transfer as a going concern treatment, the purchaser succeeds to to the vendor’s position in all respects, including, for example under the Capital Goods Scheme. Once the arrangement comprises, […]