Do HMRC’s VAT rules on listed building works stand up to scrutiny?

A recent First-tier Tax Tribunal appeal, concerning the redevelopment of an important historic building has highlighted the limitations of a VAT relief to encourage residential conversions of protected buildings.

The Royal Star and Garter Home is a Grade 2 listed building situated on Richmond Hill. After using the building for over 90 years as a nursing facility for injured members of the armed forces, its owners moved on to new premises and sold the building to a developer, which converted it into 86 flats, along with communal facilities for residents. The works, which cost £95 million to complete, left the walls and the roof substantially intact and the developer was also required by planning and listed building consent rules to retain certain internal features, including a marble staircase, the chimney stacks and the majority of its reinforced concrete floor slabs.

Source RSM

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