A. Generally, where the vendor of a property has an option to tax in place, VAT should be charged on the sale of the land and buildings.
However, if a building or part of a building is to be converted to a dwelling, a number of dwellings or solely for relevant residential use, the purchaser can request the disapplication of the option to tax.
A VAT1614D certificate can be given to the seller of a property by the purchaser requesting the disapplication of the option to tax for the conversion of the building to a dwelling or a relevant residential purpose. This certificate should be given to the seller before the exchange of contracts, letters or missives or the signing of heads of agreement.
In this case, your client is not selling an existing property for conversion. Your client is selling bare land for development and therefore the VAT1614D certificate cannot be accepted by your client. The sale of the land will be with VAT as the option to tax still applies.
Further information on the V1614D certificate can be found in VAT Notice 742A Opting to Tax Land and Buildings Section 3.4.
If you have a VAT query why not contact the VAT Advice Line on 0844 892 2470 to discuss the implications. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
