VATLP22050 - Option to tax: overview of the option to tax
Background
The facility to 바카라 사이트˜opt to tax바카라 사이트™ land and buildings was introduced on 1 August 1989 after some major VAT liability changes. Before 1 April 1989, the UK exempted or zero rated most property transactions, but after the ECJ ruled that much of this treatment was unlawful, the UK introduced standard rated VAT to the construction and freehold sale of new commercial buildings and changed the liability of long lets of commercial buildings from zero rated to exempt. Landlords therefore started to incur irrecoverable input tax on construction costs or freehold purchases. To mitigate this effect, the UK introduced the option to tax.
Before 1 June 2008, the legal terminology for an option to tax was 바카라 사이트˜election to waive exemption바카라 사이트™ and the expression 바카라 사이트˜option to tax바카라 사이트™ was only used informally. The term 바카라 사이트˜election to waive exemption바카라 사이트™ is no longer used in the legislation but you may still come across it in documents from before June 2008.
General information about the option to tax
You should see for general information about the option to tax.
This guidance supplements Notice742A where appropriate. It does not repeat the content of 742A.