VCONST03550 - Zero-rating major interest grants in buildings: 鈥榩erson constructing a building鈥�: selling and finishing partially constructed buildings
皇冠体育app sale of a partly constructed building can be a grant by a 鈥榩erson constructing a building鈥�. This has been confirmed in the case of Stapenhill Developments Limited (VTD 1593), where the Tribunal stated:
We do not consider that item 1鈥� requires a completed building to be upon the land. 皇冠体育app operative word is 鈥榗onstructing鈥� and not 鈥榓 person who has constructed鈥�. 皇冠体育app question is nevertheless to be decided as a matter of substance and degree whether or not on the facts of the case what has been done on the land is sufficient to bring the work within the ambit of the expression [鈥榩erson constructing a building鈥橾.
It is accepted that a building is being constructed when work has progressed above foundation level. This is usually when walls begin to be constructed upon the foundations. 皇冠体育appse walls need not be above ground level. However, simply digging and concreting foundations is not sufficient and in such cases the grant of a major interest in the land is not zero-rated (VCONST03530).
When a partly completed building is sold the purchaser may decide to continue the construction of the building and so become a 鈥榩erson constructing a building鈥� in their own right. 皇冠体育appy will then be able to zero-rate their first major interest grant in the property.