SDLTM03800 - Scope: How much is chargeable

Interaction with VAT FA03/SCH4/PARA2

Chargeable consideration includes any VAT that is payable in respect of a land transaction. This is also the case where the VAT charged is recoverable from Revenue & Customs as input tax.

Where an election to waive the exemption from VAT takes effect after the effective date of a transaction any VAT that subsequently becomes payable does not constitute chargeable consideration.

This is particularly relevant to leases where a landlord may decide to elect to waive the exemption after they have acquired a lease, thereby requiring the addition of VAT to the rent.

It also follows that in these circumstances VAT is not treated as a contingency.

Transfer of a going concern

Where

• there is a transfer of a going concern
• the transfer meets all the conditions set down in the relevant VAT law no VAT will be payable.

The chargeable consideration will therefore be a VAT exclusive amount.

However if the conditions for a transfer of a going concern set down in the relevant VAT law are not met and VAT is payable, the chargeable consideration will be the VAT inclusive amount.

Revenue & Customs post transaction rulings

If, following a Customs & Excise ruling

• it is confirmed that VAT is chargeable in respect of a transaction
• the purchaser had not included the VAT element of the purchase price in their stamp duty land tax self assessment

the purchaser will be required to amend their land transaction return under the provisions of FA03/SCH10/PARA6.

Any additional stamp duty land tax due on the VAT element should be accounted for with their amendment. See SDLTM80580.

Alternatively if as a result of a Revenue & Customs ruling

• it is confirmed that VAT is not chargeable in respect of a transaction
• the purchaser had included the VAT element of the purchase price in his stamp duty land tax self assessment

the purchaser will be required to amend their land transaction return under the provisions of FA03/SCH10/PARA6 and request a refund of the overpaid stamp duty land tax from the Customer Services Office in Birmingham, see SDLTM80585.