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VAT : When is property not property

By Gabelle LLP

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When property is involved in a supply, determining the applicable rate of VAT is a complex process. All rates are possible, depending on circumstances.

While this complexity provides excellent planning opportunities, there are also many pitfalls to avoid. Given the value of transactions involving property, it is worth spending time considering the issues carefully.

This is not only relevant for developers, builders and those building their own homes. Businesses which supply property for leasing or letting are also affected.

Recent case

The issue is exemplified in a recent case: International Antiques And Collectors Fairs Limited v Revenue and Customs Commissioners ([2015] UKFTT 0354 (TC), published 20 July 2015).

The taxpayer organised antiques and collector fairs and charged fees to exhibitors who booked space at the fairs. The taxpayer argued that its supply of space to the exhibitor was an exempt supply of the right to occupy land under Item 1, Group 1, Schedule 9, VAT Act 1994.

HMRC said it was more than just a supply of space, and the First-tier Tribunal agreed stating that “the booking fees are payment for participation as a seller at one of the largest antiques fairs in Europe”.

Therefore what appeared to be a supply of land/property to the exhibitor was not a supply of land/property, and the supply was standard rated.

Practical example

This makes it complex to determine whether the leasing or letting of land/property is exempt or standard rated.

Consider a practical example: a stadium has been hired out for three weeks and no option to tax has been exercised. How would a practitioner determine whether this supply was exempt as the letting of property or standard rated as the supply of property-related facilities?

It would be necessary to consider the nature of the transaction in some detail, including the different elements of the transaction, the different perspectives of the parties to the transaction, and in what combinations.

This issue was considered in a Belgian case, Régie communale autonome du stade Luc Varenne v Belgium (CJEU C-55/14), where on the facts the supply of a football stadium to a 3rd division team was deemed to be the right of access to the pitch and supplies of catering and cleaning, to which the standard rate of VAT applied.


When considering the leasing or letting of a property, it might seem self-evidently exempt, but it should be kept in mind that such activities are often standard-rated.

The process for determining the correct rate of VAT requires some careful and subtle considerations, particularly (as quoted in the tribunal) “to consider all the circumstances surrounding [the supply] in order to establish its characteristics and to assess whether it can be treated as a ‘letting of immovable property’”.

Published September 2015