This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Opting in / out VAT on land sale

Joined:Tue Feb 22, 2011 10:48 am
Opting in / out VAT on land sale

Postby mandy1959 » Thu Jan 20, 2022 6:42 pm


I am looking at buying a small strip of land, one small outbuilding is currently in situ but will probably be demolished and not replaced. 

Currently the seller, who has large parcels of land across the UK, is telling me the land as part of their whole portfollio is liable for VAT. so will be sold as such and therefore increase the cost of my buying it by many tens of thousands of pounds so to be avoided if possible, the final use would be exempt VAT. 

I believe this can be opted out of.

A few questions if I may
Would the seller have to have specified this particular area of land to the HMRC when opting in, and therefore have supporting itemised documentation/drawings etc? 
If I buy the land and pay VAT could I at that point request to opt out ( post sale)?
If I am able to opt out post sale could I claim back the VAT? 
Is the opting out process long and drawn out, if so, what time scale? 

If too difficult to answer here, any suggestions on finding a competent VAT specialist, is there a certain qualification I should look for when looking for a company to deal with it, I don't want someone who 'thinks' they know, I need someone who knows  

Many thanks

Joined:Wed Aug 06, 2008 3:09 pm

Re: Opting in / out VAT on land sale

Postby les35 » Fri Jan 21, 2022 2:37 pm

You are in extremely complex territory. An option to tax can sometimes be 'disapplied,' but that depends on (1) is it linked to the land or the buildings on the land, and (2) what will be the subsequent/final use of the land once developed? Ideally, the Vendor will provide you with HMRC's original acknowledgment of his Option to Tax application. And you will get that reviewed in light of the two questions above.
And, be careful. There is anti-avoidance legislation which can affect you even where you have the most genuine of motives.
P.S. opting in and out of VAT on land is not possible.
(And, yes, I do know what I'm talking about!)

Return to “VAT & Excise Duties”