VATLP23430 - Option to tax - anti-avoidance test: what changes have been made to the anti-avoidance measures?: the '10 per cent Occupation Rule' effective from 1 April 2010
Schedule 10 paragraph 15(3) and 15A
The Problem
The situation can arise where a bank provides finance for a development to an unconnected party and then occupies part of the development. A typical example is a shopping mall in which a bank decides to occupy one of the retail units (this can be a very small part of the whole complex). This would result in the developer바카라 사이트™s option to tax being disapplied and additional sticking input tax being incurred.
The Solution
From 1 April 2010, where a person who has provided finance for a development (but is not the grantor or a person connected to the grantor) intends to be in occupation of no more than 10 per cent of any building, they are treated as not in occupation for the purposes of the anti-avoidance provision. This is referred to as the 바카라 사이트˜10 per cent Occupation Rule바카라 사이트™ and is applied to anyone that provides finance for a development and not just banks and other financial institutions.
From 1 March 2011 a further 바카라 사이트˜2 per cent Occupation Rule바카라 사이트™ was introduced. This addressed the situation where the grantor (or a person connected to the grantor) was to be in occupation of a very small part of a building, such as a cleaner바카라 사이트™s cupboard. Where the grantor occupies no more 2 per cent of any building subject to the grant they are also treated as not in occupation.
A detailed description of both rules and how the percentage of occupation is measured is given in paragraphs 13.8.4 to 13.8.6 of .