– see also Value added tax (VAT)

Accounting checklist

Adjustment under capital goods scheme

Advantages

Affecting only optor (and his associates)

Agreement (not) to opt

Anti-avoidance

Developer financier, meaning

Developers of exempt land

Exempt land, meaning

Grants made by developer, meaning

Revocations of option

Anti-avoidance provisions

'occupation' of property

Applicability

Attempted withdrawal of option after disposal of land

Lack of positive intent invalidated option

Positive intent validated option

VAT charged on rent, no notification by freeholder of option to HMRC

Automatic permission to opt

Cases

Conditions

Beneficial owner v legal owner

Beneficial owners

Building or just land

Capital goods scheme, fair and reasonable adjustment

Case law and developers and intention

Changes after May 2008

Charities

Commercial buildings and land

Landlords

Sellers

Commercial property lenders

De-registration

Definitions

Other definitions

Schedules 8 or 9 that are applied for purposes of this Schedule

Demolition

Developers of certain non-residential buildings etc.

Disadvantages

Buyers and tenants

Generally

Disapplication

Charities

Flowchart

Generally

Intended for use: de minimis margin

Lease of sports hall

Transactions entered into having effect of

Disapplied

Barn conversion: opting to tax

ECJ case on disapplied option under Dutch law

Disapplied option: anti-avoidance provisions

Circumventing anti-avoidance provisions

Connected person

Development financier

Exempt land

Generally

Occupation

Option washing cases

Providing finance

Relevant adjustment period

Relevant person

Dwellings

Conversion of buildings for use as dwelling etc.

Dwellings designed or adapted, and intended for use as dwellings etc.

Grant to individual for construction of dwelling

Effect of

Arbitration of rent for agricultural holdings

Exclusions

Exempt supplies becoming taxable

Permission for body corporate to cease to be relevant associate of opter

Relevant associate, meaning

Effect of failure to opt by intervening property company

Effect of option

Example

Generally

Residential areas

Elections made before 1 March 1995

Elections made before 1 November 1989

Eligibility

Exclusion of new building and its curtilage from existing option

Date of exclusion

Generally

Exclusions

Effect of option to tax

Exempt rental income already obtained

Exempt supplies made

Automatic permission to opt

Written permission from HMRC

Flowcharts

Disapplied options

Procedure

Real estate election

Revoking option

Form of, and notification

Forms

General provisions

Generally

Grant of lease, pension scheme contributors

Immovable property, person liable for payment of VAT

Ineffective late option

Intended for use: de minimis margin

Interaction with transfer of going concern

Relevant residential building

Leasing or letting of immovable property

Generally

Input tax deduction

Local authorities

Generally

Permission

New building, exclusion from effect of option

No option made

No retrospective option

Non-deductible input tax

Non-domestic property in UK

Notification

After disposal of land

Belated

Erroneous

Generally

In writing, no such requirement for option

Real estate election

Transfer of business as a going concern

Option made pre-1 June 2008 specifying a description of land

Overview

Partially exempt tenant

Partnership

Generally

Transfer of an interest in land

Persons authorised to opt on behalf of body

Persons bound by

Pre-election input tax on refurbishment of building

Disallowance conflicting with Community law

Generally

Pre-option exempt grants: prior permission before exercise of option

Application

Generally

Purported exercise where prior permission not obtained

Price in option agreement

Procedure

Flowchart

Generally

Public houses

Intended change of use

Rent attributable to residential accommodation

Re-attribution of input tax: date when change of intention applies

Real estate election

Existing option to tax property in which opter holds no relevant interest

Flowchart

Generally

Notification within 30 days

When relevant interest in building or land acquired

Real estate elections

Land subsequently acquired

Revocation

Supplementary

Recovery of input tax

Generally

Incurrence pre-opting to tax

Refusal, appeals

Registration

Relevant date, sale of investment property at auction

Relevant housing associations

Rent, addition of VAT

Generally

Rent arrears collected from subtenant

VAT valid part of rent demanded

Repayment of tax element in purchase price

Residential caravans

Residential developers who are sellers

Residential houseboats

Retention of records

Revocation

Anti-avoidance

Cooling off period

Lapse of more than 20 years since option had effect

Lapse of six years since having a relevant interest

Real estate elections

Revoking

20 years since opting

Automatic revocation after six years without relevant interest

Flowchart

Generally

Six-month cooling-off period

Unwise option

Scope

SDLT

SDLT and VAT: checks by HMRC for opted property underdeclarations

Sellers

Commercial buildings and land

Residential developers

Sub-letting of surplus properties

Subletting commercial premises

Summary

Supplies in relation to building where part designed or intended for residential or charitable use and part designed or intended for other uses

Supply of land taxable at a standard rate

Tax point

Time from which option has effect

Timing

HMRC's prior written permission to opt

Transfer of a going concern

Timing of grant and supplies

Transfer of business as a going concern

Generally

Use of assets following

Trumped by exemption for fund-raising events

Validity

Grant of underlease of land

Validity of notice served for failure to pay rent

VAT groups

Generally

Option binding all members

Relevant associates